Avenor Will Not Acquire Repap p.81

By: Editorial Staff NEWSPRINT MAKER AVENOR Inc. will not acquire coated paper maker Repap Enterprises Inc. The proposal was rejected last month by almost 75% of Avenor shareholders and approved by more than 90% of Repap shareholders.
In a proposed stock swap originally valued at more than $800 million (Canadian), Avenor also would have assumed Repap debt of C$2.25 billion (E&P, Jan. 18, p. 22). By the time shareholders voted, share prices and a changed swap ratio brought the value of the proposed transaction to less than C$380 million.
A third Montreal-based papermaker, Domtar Inc., proposed a merger with Avenor, which refused to consider the matter before the vote on acquiring Repap. Shortly before the vote, an Avenor executive told the Wall Street Journal that his company would talk to others, including Domtar, which reportedly is interested in combining all three companies.
The agency managing Quebec's public pension funds supported Domtar's approach to Avenor. It owns 22% of Domtar, 10% of Avenor and a stake in Repap. Domtar sold its business in newsprint and other uncoated groundwood paper in 1994.
Avenor's Newsprint Group contributed 44% of the company's 1996 net sales of C$2.06 billion, compared with 40.5% of its 1995 net sales of C$2.61 billion. The group's operating earnings were C$168.2 million last year and C$292.5 million in 1995. Avenor's 1996 net earnings came to $C11.3 million, down from C$348.1 million in 1995.
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?copyright Editor & Publisher- April 26, 1997.


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