Abitibi waiting to hear on Avenor takeover bid

Abitibi-Consolidated could know as early as the end of March if its $3-billion takeover bid on Avenor’s six mills and three sawmills is accepted by shareholders.
If it is, Susan Rogers, vice-president of corporate communications, admitted it would give Abitibi a “significant fibre basket” in Northwestern Ontario.
But she also noted the transfer of those logging rights would have to be approved by the Ministry of Natural Resources first.
“It’s a regulatory requirement in Ontario for the minister of natural resources to approve the transfer of fibre rights,” she said yesterday from Montreal.
Abitibi offered $28 per share, or 1.425 of its own shares, as well as absorbing Avenor’s $1-billion net debt, to shareholders last week. Abitibi also stressed the offer was intended to be a friendly bid even though it was unsolicited.
Rogers explained their offer was on the table until another bidder comes in, or if Avenor management comes out with a specific move–and she didn’t want to speculate on what that might be.
“We wouldn’t [raise the offer] just because Avenor said they didn’t like it,” she said, referring to published reports last week that Avenor management snubbed the offer as being inadequate.
“Avenor management responded in a manner that was not a surprise to us at all,” she added, noting they were trying to get the best possible price for the shares.
Abitibi made the offer Feb. 25, and Rogers said Avenor had a legal requirement to provide a list of its shareholders within 10 days of that.
She anticipated a package outlining the details of the takeover bid could be in the mail by Monday, with shareholders having 21 days after those packages are mailed to say if they planned to sell or not.
“It strengthens our market,” Rogers added.
Meanwhile, if the takeover goes ahead, Rogers said Abitibi plans to sell off Avenor’s Dryden mill, an uncoated freesheet facility, because it focuses on newsprint and groundwood paper.
But she didn’t anticipate they would have any problems with that sale, noting it was a good asset they felt was highly saleable.
If the bid is accepted and the Dryden mill is sold, Abitibi would have 22 paper mills — 14 in Canada, four in the U.S., and one in the U.K. The company also would have a newsprint capacity of 4.2 million tones and would sell an additional 1.1 million tones of brokered newsprint.
it would remain at 1.5 million tones with its groundwood capacity, with about a 875,000-tonne market pulp capacity.
“When Abitibi-Price and Stone Consolidated merged, we said we were building a platform for future growth,” Abitibi president and CEO james Doughan noted when the announcement was made last week.
“Avenor will make an excellent strategic fit with our own asset base, and will add to our focus in newsprint and groundwood papers for communication,” he added.