|
|
Enron Mail |
fyi
---------------------- Forwarded by Tanya Rohauer/HOU/ECT on 08/30/2000 12:= 51=20 PM --------------------------- =20 From: Tanya Rohauer = =20 08/29/2000 07:15 AM=09 =09 =09 =09 =20 =09 To: William S Bradford/HOU/ECT@ECT cc: =20 Subject: repap UPM-KYMMENE TO ACQUIRE REPAP Helsinki, Finland and Stamford, Connecticut, (August 29, 2000) =01) UPM-Kym= mene=20 Corporation (Helsinki Stock Exchange: UPM1V; NYSE:UPM) and Repap Enterprise= s=20 Inc. (TSE:RPP) today announced that they have signed an acquisition agreeme= nt=20 under which UPM-Kymmene will acquire Repap in a transaction to be effected = by=20 way of an amalgamation. Pursuant to the agreement, Repap=01,s shareholders = will=20 receive CAD 0.20 per common share, which represents a premium of=20 approximately 100% over the recent trading price of Repap common shares on= =20 The Toronto Stock Exchange. The transaction values Repap=01,s equity at=20 approximately CAD 160 million (EUR 120 million), implying a total enterpris= e=20 value for Repap of approximately CAD 1.35 billion (EUR 1.01 billion). The= =20 transaction will result in a goodwill value of approximately CAD 400 milli= on=20 (EUR 300 million). With respect to Iceberg's outstanding debt securities,= =20 UPM-Kymmene is considering its options, which may include purchases of such= =20 securities in negotiated transactions, a redemption of all or a portion of= =20 such securities after consummation of the transaction and/or leaving such= =20 securities outstanding. The transaction has been unanimously approved by the boards of directors of= =20 both UPM-Kymmene and Repap. In addition, Repap=01,s two largest shareholder= s,=20 the Third Avenue Trust and TD Asset Management Inc., have agreed to support= =20 the transaction and vote their combined total of approximately 31% of Repap= =01,s=20 common shares in favour of approving the transaction, subject to certain=20 conditions as outlined in their respective support agreements. The transaction requires the approval of 66 2/3% of the votes cast by Repap= =20 shareholders. A shareholders=01, meeting to approve the amalgamation is exp= ected=20 to be held in mid-October. The transaction is conditional upon receipt of a= ll=20 necessary regulatory approvals. The transaction does not require the approv= al=20 of UPM-Kymmene shareholders. The acquisition supports UPM-Kymmene=01,s long-term strategy. The transacti= on=20 strengthens UPM-Kymmene=01,s global leadership in magazine papers and it is= a=20 logical step for UPM- Kymmene to become a major local magazine paper producer in North America.= =20 UPM-Kymmene continues to further develop a low cost production structure wi= th=20 state-of-the-art facilities. In addition, substantial synergies can be=20 achieved. UPM-Kymmene estimates that approximately CAD 50 million (EUR 37= =20 million) in annual pre-tax synergies can be achieved by 2002 through produc= t=20 and market mix optimization, cost savings in purchasing, logistics and=20 selling, general and administrative expenses as well as via improvement=20 through best practices. Juha Niemel,, the President and Chief Executive Officer of UPM-Kymmene said= =20 =01&that Repap=01,s management and personnel have done an outstanding job o= ver the=20 past years to improve the financial and operational performance of the=20 company. The fully integrated mill will enable UPM-Kymmene to better serve= =20 its North American customers=018. Stephen Larson, the President and Chief Executive Officer of Repap, stated= =20 that =01&Repap=01,s world class operations and people will complement UPM-K= ymmene=01,s=20 core competence of efficiency very well=018. Repap has agreed not to solicit competing offers or proposals to the=20 transaction, although it may respond to an unsolicited superior proposal. A= s=20 a condition of UPM-Kymmene entering into the transaction, Repap has granted= =20 UPM-Kymmene an irrevocable option to purchase newly issued common shares of= =20 Repap representing approximately 19.9% of the issued and outstanding common= =20 shares of Repap. This option may be exercised by UPM-Kymmene if a competing= =20 acquisition proposal is publicly announced. In certain circumstances, Repap= =20 will be required to pay a termination fee to UPM-Kymmene. The option and th= e=20 termination fee have an aggregate economic value of CAD 18 million (EUR 13.= 6=20 million), representing approximately 1.3% of Repap=01,s enterprise value. RBC Dominion Securities Inc. acted as financial advisor to UPM-Kymmene and= =20 Donaldson, Lufkin & Jenrette acted as financial advisor to Repap. About UPM-Kymmene UPM-Kymmene, which is based in Helsinki, Finland, is one of the world=01,s= =20 largest forest product companies and paper producers. The Group=01,s turnov= er in=20 1999 amounted to EUR 8.3 billion (CAD 11.1 billion) and operating profit to= =20 EUR 1.6 billion (CAD 2.1 billion). The company=01,s product range covers=20 printing papers, converting materials and wood products. Printing Papers,= =20 which comprise magazine papers, newsprint and fine papers, account for over= =20 half of the Group=01,s turnover. UPM-Kymmene is the world=01,s second larg= est=20 producer of magazine papers and is among the top ten producers of newsprint= =20 and fine papers. UPM Converting is among Europe=01,s leading suppliers of= =20 converting materials. The Group is also Europe=01,s biggest plywood produce= r and=20 one of the continent=01,s biggest producers of sawn timber. UPM-Kymmene=01,= s=20 operations are focused on European Union countries and the United States,= =20 where the company owns Blandin Paper in Minnesota producing LWC magazine=20 papers. North American sales account for 11% of the Group=01,s turnover. Th= e=20 Group has production plants in 15 countries and 170 sales and distribution= =20 companies spanning five continents. About Repap Repap is a major producer of coated groundwood paper (LWC) with a 9% share = of=20 the total North American capacity. In 1999, the company=01,s net sales amo= unted=20 to CAD 570 million (EUR 425 million) and operating profit to CAD 68 million= =20 (EUR 51 million). The company=01,s high quality paper is utilized in magazi= nes,=20 catalogs, inserts and commercial printing applications. Repap's world-class= =20 coated paper complex in New Brunswick, Canada, has two modern paper machine= s=20 with a design capacity of 450,000 metric tons, a northern bleached softwood= =20 kraft pulp mill with an annual capacity of 235,000 metric tons and an=20 integrated groundwood pulp mill with an annual capacity of 125,000 metric= =20 tons. Repap also has two sawmills with an annual capacity of 137,000 cubic= =20 metres. Repap employed 1,480 persons at the end of 1999. This press release contains certain statements that are neither reported=20 financial results nor other historical information. These statements are=20 forward-looking statements within the meaning of the safe-harbor provisions= =20 of the U.S. federal securities law. These forward- looking statements are= =20 subject to risks and uncertainties that could cause actual results to diffe= r=20 materially from those expressed in the forward-looking statements. Many of= =20 these risks and uncertainties relate to factors that are beyond the=20 companies=01, ability to control or estimate precisely, such as future mark= et=20 conditions, the behavior of other market participants and the actions of=20 governmental regulators. These and other risk factors are detailed in the t= wo=20 companies=01, SEC reports. Readers are cautioned not to place undue relianc= e on=20 these forward- looking statements, which speak only as of the date of this= =20 press release. The companies do not undertake any obligation to publicly=20 release any revisions to these forward-looking statements to reflect events= =20 or circumstances after the date of this press release. -30- For further information, please contact: UPM-Kymmene Corporation: Martin Granholm, Executive Vice President, tel. +358 204 15 0004 Olavi Kauppila, Vice President, Investor Relations, tel. +358 204 15 0658 Repap Enterprises Inc.: Stephen Larson, President & Chief Executive Officer, tel. 1 (203) 964-6163 Michelle Cormier, Vice President & Chief Financial Officer, tel. 1 (203)=20 964-6168
|