Fibrek's board of directors has rejected the unsolicited bid from Resolute Forest Products (formerly AbitibiBowater) and taken steps to buy it time to fight the hostile bid.
The Quebec-based pulp producer has adopted a shareholder rights plan and is obtaining an independent valuation of its common shares.
Because Resolute is Fibrek's largest supplier of wood chips, and Fairfax Financial Holdings is the largest shareholder in both companies, the board of Fibrek says it is in the best interest of shareholders to get a formal valuation.
"We strongly advise our shareholders not to tender their shares for the insider bid, and not to take any action before the formal valuation is completed and publicly disclosed," says Hubert Lacroix, chairman of the board of Fibrek.
The Fibrek board has taken steps to solicit competing offers and evaluate strategic alternatives.
Resolute spokesperson Seth Kursman told Canadian Press that his company, in turn, is reviewing Fibrek's response to its bid.
According to CP, the acquisition of Fibrek's St. Felicien, Que., mill would increase Resolute's bleached kraft pulp capacity by about 35%.