HERE IT IS:
Canadian Company Press Release
TBC.A 1999-01-11 (provided courtesy of Canadian Corporate News.)
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Signing of a Definitive Agreement Between Tembec and Crestbrook
VANCOUVER, BRITISH COLUMBIA--Frank Dottori, President and Chief
Executive Officer of Tembec Inc. ("Tembec") and Jim Shepherd,
President and Chief Operating Officer of Crestbrook Forest
Industries Ltd. ("Crestbrook") announced today the signing of a
definitive agreement between Tembec and Crestbrook which calls for
Tembec to acquire all of the outstanding shares of Crestbrook by
way of a plan of arrangement (the "Arrangement"). Under the
Arrangement, shareholders of Crestbrook may elect to receive
either (a) 0.51298 of a Class A Tembec Share or (b) $4.50 cash,
for each Crestbrook share, with the maximum aggregate cash payable
not exceeding $23.5 million. Any shortfall in available cash will
be satisfied by the issuance of Tembec Shares. There are 15.65
million Crestbrook Shares outstanding.
In addition, Crestbrook shareholders will receive a Contingent
Value Right which may entitle the holder to receive a one-time
payment on March 31, 2000 of up to a maximum of $1.50 per
Crestbrook share depending upon the amount by which the average
price of NBSK pulp for calendar 1999 exceeds US$549/tonne. The
current quoted price for these purposes is approximately
US$500/tonne.
Completion of the transaction is subject to certain conditions
including receipt of the approval of Crestbrook shareholders at a
meeting anticipated to be held on or about March 23, 1999, and
receipt of all applicable regulatory approvals including in
particular approval of the Minister of Forests under the British
Columbia Forest Act.
Mitsubishi Corporation, the owner of approximately 30.65 percent
of the outstanding common shares of Crestbrook and Oji Paper Co.,
Ltd., the owner of approximately 20.43 percent of the outstanding
common shares of Crestbrook have entered into lock-up agreements
with Tembec where they have agreed to vote in favour of the Plan
of Arrangement. Under the Lock-up Agreements, Mitsubishi and Oji
may not accept any other offer or proposal unless it is in excess
of $5.00 per Crestbrook Share.
The Board of Directors of Crestbrook has unanimously recommended
that its shareholders vote in favour of the plan of arrangement
upon the recommendation of an Independent Committee of
Crestbrook's Board. The Independent Committee received a fairness
opinion from its financial advisor, CIBC Wood Gundy Securities
Inc. that the consideration to be received under the offer is fair
from a financial point of view to the Crestbrook Minority
Shareholders.
Nesbitt Burns Inc. is acting as financial advisor to Tembec in
connection with the transaction.
Frank Dottori stated: "We believe that Crestbrook has modern
assets, good management and employees and significant upside
potential. The combination of Tembec and Crestbrook will bring
significant synergies and will create additional value for our
shareholders."
Jim Shepherd stated: "This transaction provides an opportunity
for both Crestbrook shareholders and employees to move forward
with an organization that shares its culture and philosophy."
Tembec is a major Canadian integrated forest products company.
Tembec's Class A shares and 6.5 percent convertible unsecured
subordinated U.S. dollar denominated debentures are listed on The
Toronto Stock Exchange and the Montreal Exchange respectively
under the symbols TBC.A and TBC.DB.U, respectively. More
information on Tembec can be obtained at its home page
www.tembec.ca
Crestbrook produces pulp, dimension lumber and higher value lumber
products at its facilities in southeastern British Columbia.
Crestbrook's common shares are listed on The Toronto Stock
Exchange and the Vancouver Stock Exchange under the symbol CFI.
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