Mercer International Inc. has abandoned its battle with AbitibiBowater Inc. for control of pulp maker Fibrek Inc.
Mercer said Monday it is withdrawing its offer for Fibrek and will return the Fibrek shares that were tendered to the bid.
The decision marks the end of almost three months of legal setbacks for Mercer in its the drawn-out fight for Fibrek, whose largest shareholder is Prem Watsa’s Fairfax Financial Holdings Ltd.
The takeover battle between Mercer and AbitiBowater – now known as Resolute Forest Products – has been played out against a backdrop of rising prospects for pulp exports to China.
Fibrek decided to throw in the towel after the Supreme Court of Canada declined to hear an appeal it filed asking the top court to rule on the defence it has used to fend off Resolute’s hostile takeover bid.
Mercer’s bid, which was 40 cents higher than Resolute’s $1.00-per-share offer, had the backing of Fibrek’s board.
The Fibrek board has also adopted a poison pill that would allow shareholders to benefit from Mercer’s higher offer.
Fibrek operates three mills with a combined capacity to produce close to 800,000 tonnes a year.
Resolute, which already owns 45.74 per cent of Fibrek’s shares, has the support of Fairfax.