March 13, 2012: Supreme Court of Canada is seen in Ottawa. DAVE CHAN for The Globe and MailDave Chan/The Globe and Mail
The Supreme Court of Canada has declined to hear an appeal by Fibrek Inc. against a lower court ruling that blocked an attempt to enable a white knight bid, putting hostile suitor AbitibiBowater Inc. in a strong position to buy the company.
Fibrek is at the centre of a hostile takeover battle. AbitibiBowater offered $1 a share. White knight Mercer International Inc. offered $1.40, but demanded that Fibrek issue warrants to buy stock at $1 a share to Mercer. The idea was to level the playing field between Mercer and Abitibi, which has the support of such a large chunk of Fibrek's shareholder base that its lead would be otherwise almost insurmountable.
The Quebec securities regulator ruled that the plan to issue the warrants was offside. Fibrek appealed that and won, but Abitibi appealed that judgment to the Quebec Court of Appeal, which once again ruled that the warrant plan was not appropriate.
With the Supreme Court's decision, revealed in this short statement the court of appeal judgment stands. As per custom, the Supreme Court offered no reasons for its decision.
For a full look at the background and potential implications of the situation, see this earlier item.