Catalyst tells shareholders to reject Third Avenue takeover bid
Last Updated: Monday, August 28, 2006 | 4:13 PM ET
CBC News
The board of directors of Vancouver-based Catalyst Paper Corp. on Monday urged shareholders to turn down a takeover bid from Third Avenue Management, calling the $3.30-per-share offer too low.
Third Avenue, a New York City-based investment firm, made its unsolicited bid for up to 39 million shares of Catalyst on Aug. 11.
Keith Purchase, Catalyst's chairman, also said the company has concerns about the "coercive nature of the (Third Avenue) bid, and the fact that they have failed to provide a clear indication of their plans for the company should they gain control."
"We respect Third Avenue's reputation as a deep value investor and share their view that Catalyst is significantly undervalued," Purchase said in a release. "The board is confident in management's ability to continue delivering significant productivity gains in the years ahead, but we do not believe that value is reflected in the Third Avenue offer."
Catalyst produces mechanical printing paper and kraft pulp, and owns the largest paper recycling facility in Western Canada. The company has five mills with 3,800 employees.
Shares of Catalyst rose nine cents to finish at $3.10 on the TSX.
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