Fibrek in talks with third parties as alternative to Resolute hostile bid

MONTREAL - Pulp producer Fibrek Inc. says it is in talks with several groups interested in a strategic alternative to a $130-million hostile takeover bid by Resolute Forest Products (TSX:ABH), formerly known as AbitibiBowater.

The Quebec-based company said Friday that a proposal has emerged from its strategic review process initiated by its board of directors, but it declined to disclose details.

Fibrek (TSX:FBK) said it's impossible to predict if any other competing offers will emerge but it expects to receive proposals from the third parties in negotiations.

Parties have until Friday at 5 p.m. to submit proposals.

Fibrek disclosed the strategic talks at the request of a Quebec administrative securities tribunal. The company again urged shareholders not to tender their shares.

Resolute has extended its offer deadline until Feb. 13 while a Quebec regulatory tribunal completes hearings.

The Bureau de decision et de revision, which is an administrative tribunal to deal with Quebec's securities law and regulatory matters, has scheduled hearings through next Wednesday.

Fibrek's leadership has rejected the takeover offer as too low and set up the shareholder rights plan to thwart the deal — or at least give it time to find a more palatable alternative.

Fibrek produces high-quality virgin and recycled kraft pulp at three mills in Quebec, West Virginia and Michigan. It has a combined annual production capacity of 760,000 tonnes and approximately 500 employees.

If the acquisition goes ahead, the St-Felicien mill, in the Lac-St-Jean region north of Quebec City, will increase Resolute's bleached kraft pulp by about 35 per cent.

Pulp from the Quebec mill is used in printing, writing and specialty papers, as well as packaging and tissue in markets in North America and Europe.