A NEWS RELEASE dated January 28 1997 appeared on the wire anouncing that Avenor & Repap have filed their proxy circular on the proposed transaction.
For those of you who have yet to see it, I'll give you the reader's digest version...
1. In the proxy, "Avenor reaffirms that it's prime strategic goal is to progress from a commodity producer operating in mature markets to a flexible producer of high value grades targeted at growing market segments".
2. Also, "Repap's coated paper business provides Avenor with immediate access to competitive modern production capacity, technical expertise and established customer relationships in a market that has higher profit margins, less volatile pricing and better growth prospects".
Am I missing something here... irrespective of debt, which everyone seems to be focused on, it sounds like Repap is a company with a great deal of perceived value - at least in the minds of Avenor management.
Can the market be so wrong, after all, this is the same company that on Dec. 18 1996 was trading on the TSE @ $5.55 per share. If the debt was such a burden, why had the stock traded in this higher range for over 6 month's without notice nor mention. I'm not a sophisticated stock analyst - just somebody trying to make some sense of this... and a buck at the same time.
3.The release goes on to discuss Avenor's debt restructuring plans after the transaction. It plans to "proceed with divestures of non-core assets and realize savings from operating and tax synergies".
The release also indicates that both the Avenor and Repap shareholders meetings will take place March 12, 1997 to vote on the transaction.
I would welcome additional feedback from those following this story.
As a strategy, I'm considering purchasing Repap for my RRSP program and depending on how it goes, it could be short term or long term.
BUT, in trying to talk myself out of this gamble, I'm finding more reason to jump into this one. Any other strategies out there on how to tackle this one...
Billyjojimbob |
