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Fibrek finds white night in Mercer International

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Vancouver Port Authority

Pulp producer Fibrek Inc. says it has struck a friendly deal to be acquired by Vancouver-based Mercer International Inc.

The Montreal-based pulp maker said early Friday the Mercer cash and share bid tops a $130-million offer by Resolute Forest Products , the former AbitibiBowater and a minority shareholder of Fibrek.

Fibrek shares ran up 18 cents or almost 16 per cent to $1.31 in early trading on the Toronto stock market, while Resolute shares were up six cents at $15.19. Mercer shares were down 24 cents to $8.01 (U.S.) on the Nasdaq.

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Fibrek says the bid values the company at about $1.30 a share. With 130 million shares outstanding, the Mercer deal would value the company at about $170-million.

Mercer operates in the pulp business and produces market northern bleached softwood kraft, or 'NBSK', pulp for export around the world.

Fibrek said the friendly deal represents a 30-per-cent premium to Resolute's bid and the company's board is urging shareholders to accept the offer.

"This has been a challenging time for Fibrek as we have sought to maximize value for our shareholders and advance the interests of our other stakeholders," chairman Hubert Lacroix said in a release before stock markets opened Friday.

"We are pleased to support Mercer's offer and recommend it to our shareholders as we believe this offer meets our goal and provides a significant premium relative to Abitibi's unsolicited offer."

Fibrek's president and CEO Pierre Gabriel Cote said the friendly deal will benefit both companies and help Fibrek grow its business.

"There are significant similarities between Fibrek and Mercer given that we are both pulp producers with a culture of operational excellence," said Mr. Cote.

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Friday's friendly deal came a day after Quebec securities regulators quashed Fibrek's poison-pill defence against the Resolute bid, which expires next Monday.

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