Cellu Tissue (NYSE:CLU): Tissue Take Over +49%

in Transaction

Cellu Tissue (NYSE:CLU), a North American producer of tissue products, today announced that it has entered into a definitive merger agreement with Clearwater Paper Corporation ("Clearwater") pursuant to which Clearwater would acquire all of the outstanding common stock of the Company in an all-cash transaction which values the Company at approximately $502 million, including approximately $255 million of debt. Under the terms of the agreement, the Company's stockholders will receive $12.00 per share in cash for each share of common stock they own, representing a premium, based on the closing price on September 15, 2010, of approximately 52.6% over the 30 day average closing trading price and 48.2% over the 90 day average closing trading price.

The agreement has been unanimously approved by the Company's Board of Directors. The transaction was recommended to the Company's Board of Directors by a Transaction Committee established to evaluate the transaction.  The closing of the merger is not conditioned on Clearwater obtaining financing. The merger is subject to certain customary conditions, including the receipt of regulatory approvals and is expected to be completed in the fourth quarter of calendar 2010.

Weston Presidio V, L.P., which acquired the Company in 2006, is the Company's largest shareholder and is also represented on the Company's Board of Directors. It and Russell C. Taylor, the Company's President and Chief Executive Officer, have agreed to vote shares owned by them representing, in the aggregate, approximately 56% of the Company's outstanding shares, in favor of the transaction.

In connection with the transaction, the Company or Clearwater intends to tender for or defease the Company's outstanding 11.5% Senior Notes due 2014.  Mr. Taylor commented on the transaction stating, "The Company's Board of Directors has concluded a lengthy evaluation of this transaction and has determined that the transaction will provide meaningful value to, and is in the best interests of, our stockholders."

R. Sean Honey, Chairman of the Company and a Partner at Weston Presidio stated, "Weston Presidio is pleased to have worked with Cellu Tissue's talented management team and dedicated employees as they have continued to implement the Company's growth strategy."  Goldman, Sachs & Co. acted as financial advisor and King & Spalding LLP acted as legal advisor to the Company. Banc of America Merrill Lynch acted as financial advisor and Pillsbury Winthrop Shaw Pittman LLP acted as legal advisor to Clearwater.

For more information  visit: http://www.worldmarketmedia.com/779/section.aspx/2391/post/cellu-tissue-nyseclu-tissue-take-over-49

Author Box
Ronald Russo has 19324 articles online and 24 fans

WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor's Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies.

Add New Comment

Cellu Tissue (NYSE:CLU): Tissue Take Over +49%

Log in or Create Account to post a comment.
     
*
*
Security Code: Captcha Image Change Image
This article was published on 2010/09/17