May 3, 2012 / 12:27 AM / 5 years ago

UPDATE 1-Resolute wins control over majority of Fibrek shares

TORONTO, May 2 (Reuters) - Resolute Forest Products said on Wednesday it has won control of 50.1 percent of shares of North American pulp producer Fibrek Inc, taking it a big step closer toward its goal of acquiring full control of Fibrek.

Montreal-based Resolute, formerly known as AbitibiBowater Inc, has been locked in a battle to acquire Fibrek for months. Resolute said in November it planned to buy Fibrek for C$130 million ($131.5 million). The bid had the backing of some major investors who controlled roughly 46 percent of Fibrek’s shares.

Fibrek’s management, however, has strongly opposed the C$1 a share bid. Mercer International emerged as Fibrek’s white knight in February with a C$1.30 per share bid that also involved a controversial private placement of Fibrek warrants.

The warrants would have leveled the playing field and negated the advantage that Resolute held through its lock-up agreements with certain large Fibrek shareholders.

However, regulators and courts ruled that the proposed issue of special warrants was unlawful. Mercer finally bowed out of the battle for Fibrek on Monday, paving the way for Resolute to clinch a deal.

Resolute said its offer remains open until Friday, May 4.

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