and
Domtar Corporation announces the extension
of its previously announced consent solicitations related to its
Senior Notes
Karta Halten B.V., a private limited company organized under the
laws of the Netherlands (“Karta Halten”), through its wholly owned
subsidiary, Pearl Merger Sub Inc., a Delaware corporation (“Merger
Sub”) and affiliate of Paper Excellence B.V., a private limited
company organized under the laws of the Netherlands (“Paper
Excellence”), announced today (i) the extension of the previously
announced tender offers (each, an “Offer” and together, the
“Offers”) by Merger Sub to purchase for cash any and all of Domtar
Corporation’s (“Domtar”) outstanding (a) 6.25% Senior Notes due
2042 (the “2042 Notes”) and (b) 6.75% Senior Notes due 2044 (the
“2044 Notes” and, together with the 2042 Notes, the “Notes,” each
such series of the Notes, a “Series”) and of the related consent
solicitations (the “Offer Consent Solicitations”), (ii) an increase
to the Total Tender Offer Consideration (as defined below) offered
to holders of each Series of the Notes that validly tender (and do
not validly withdraw) their Notes in the Offers prior to the Early
Tender Deadline (as defined below) and (iii) other amendments to
the terms of the Offers and the Offer Consent Solicitations
described in more detail below and as set forth in Supplement No.
2, dated August 23, 2021, to the Offer to Purchase and Consent
Solicitation Statement, dated August 9, 2021 (as supplemented, and
as it may be further supplemented and amended from time to time,
the “Offer to Purchase”). In addition, Domtar announced today the
extension of Domtar’s previously announced consent solicitations
(the “Domtar Consent Solicitations”), which solicit consents from
the holders of the Notes of each Series to certain proposed
amendments to the senior indenture governing the Notes (the
“Indenture”), as well as an increase to the consent payment (the
“Change of Control Consent Solicitation Payment”) offered to
holders of each Series of the Notes that validly deliver (and do
not validly revoke) consents in the Domtar Consent Solicitations
prior to the Consent Solicitation Deadline (as defined below).
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The Offers
Merger Sub has announced today that it has increased the amount
of the total tender offer consideration (the “Total Tender Offer
Consideration”) with respect to each of the Offers from $1,012.50
per $1,000 principal amount of Notes of each Series to $1,020.00
per $1,000 principal amount of Notes of each Series accepted by
Merger Sub for purchase and validly tendered (and not validly
withdrawn) by holders of the Notes prior to the Early Tender
Deadline. This is the result of an increase in the amount of the
early tender payment (the “Early Tender Payment”) with respect to
each of the Offers from $50.00 per $1,000 principal amount of Notes
of each Series to $57.50 per $1,000 principal amount of Notes of
each Series accepted by Merger Sub for purchase and validly
tendered (and not validly withdrawn) by holders of the Notes prior
to the Early Tender Deadline. The Tender Offer Consideration with
respect to each of the Offers remains unchanged at $962.50 per
$1,000 principal amount of Notes of each Series accepted by Merger
Sub for purchase and validly tendered (and not validly withdrawn)
by holders of the Notes following the Early Tender Deadline but
prior to the Expiration Time (as defined below).
Merger Sub also announced that it has extended the time and date
by which (1) holders of Notes must validly tender (and not validly
withdraw) their Notes in the Offers and the Offer Consent
Solicitations to be eligible to receive the Early Tender Payment
(such time and date, as extended and as the same may be further
extended, the “Early Tender Deadline”) to 5:00 p.m., New York City
time, on August 27, 2021, (2) Notes validly tendered pursuant to
the Offers and the Offer Consent Solicitations may be withdrawn
(such time and date, as extended and as the same may be further
extended, the “Withdrawal Deadline”) to 5:00 p.m., New York City
time, on August 27, 2021, and (3) holders of Notes must validly
tender (and not validly withdraw) their Notes in the Offers and the
Offer Consent Solicitations to be eligible to receive the Tender
Offer Consideration (such time and date, as extended and as the
same may be further extended, the “Expiration Time”) to Midnight
(end of day), New York City time, on October 1, 2021.
In addition, Merger Sub has announced that it is making the
following modifications to the terms of the Offers and the Offer
Consent Solicitations. First, Merger Sub is modifying the terms of
the Offer Consent Solicitations to exclude the Offer Exit Proposed
Amendments (other than the Reporting Covenant Amendment and the
amendment to the definition of “Change of Control” under the
Indenture to exclude the Paper Excellence Transaction) from the
proposed amendments to the Indenture that are being solicited from
holders of the Notes of each Series in connection with the Offer
Consent Solicitations. This means that only (i) Offer Exit Consents
to the Reporting Covenant Amendment to the Indenture and (ii) Offer
Change of Control Consents to the Change of Control Proposed
Amendments to the Indenture are being solicited from holders of
each Series of Notes in connection with the Offer Consent
Solicitations. As a result, the proposed amendments to the
Indenture do not include an amendment to eliminate substantially
all of the restrictive covenants in the Indenture or an amendment
to eliminate certain of the events which may lead to an “Event of
Default” in the Indenture. Second, Merger Sub has announced that it
now expects to accept Notes of each Series validly tendered (and
not validly withdrawn) in the Offers if, prior to the Expiration
Time, (a) the Change of Control Requisite Consent Condition has
been satisfied with respect to any Series of Notes by the
submission of Solicitation Change of Control Consents in respect of
a majority of the aggregate principal amount outstanding of such
Series of Notes, without counting Offer Change of Control Consents,
and (b) the Change of Control Supplemental Indenture has been
executed with respect to such Series of Notes. This means that if
Solicitation Change of Control Consents have been submitted in
respect of a majority of the aggregate principal amount of the
outstanding Notes of a Series pursuant to the Domtar Consent
Solicitations and, as a result, a Change of Control Supplemental
Indenture has been executed with respect to such Series of Notes,
then Merger Sub intends to accept for purchase any Notes of such
Series validly tendered (and not validly withdrawn) in the
Offers.
As of 5:00 p.m., New York City time, on August 20, 2021,
approximately $57.5 million in aggregate principal amount of 2042
Notes and approximately $43.6 million in aggregate principal amount
of 2044 Notes have been validly tendered (and not validly
withdrawn) in the Offers.
The Domtar Consent Solicitations
Domtar has announced that it has increased the consent payment
(the “Change of Control Consent Solicitation Payment”) in
connection with the Domtar Consent Solicitations from $2.50 per
$1,000 principal amount of Notes to $10.00 per $1,000 principal
amount of Notes of each Series validly delivered for consent (and
not validly revoked) by holders of Notes of each Series prior to
the Consent Solicitation Deadline.
Domtar also announced that it has extended the time and the date
by which holders of the Notes must validly deliver (and not validly
revoke) consents in connection with the Domtar Consent
Solicitations to be eligible to receive the Change of Control
Consent Solicitation Payment to 5:00 p.m., New York City time on
August 27, 2021 (such time and date, as extended and as the same
may be further extended, the “Consent Solicitation Deadline”).
As of 5:00 p.m., New York City time on August 20, 2021, holders
of approximately $15.2 million in aggregate principal amount of
2042 Notes and holders of approximately $5.8 million in aggregate
principal amount of 2044 Notes have validly delivered (and not
validly revoked) consents in the Domtar Consent Solicitations.
With the exception of the foregoing amendments, all other terms
and conditions of the Offers, the Offer Consent Solicitations and
the Domtar Consent Solicitations, as previously announced and
described in the Offer to Purchase, remain unchanged.
The following table sets forth certain key dates of the Offers,
the Offer Consent Solicitations and the Domtar Consent
Solicitations, as extended. Further information may be found in the
Offer to Purchase:
Key Date
Calendar Date
Commencement Date
August 9, 2021
Early Tender Deadline
5:00 p.m., New York City time, on August
27, 2021, unless extended by Merger Sub
Withdrawal Deadline
5:00 p.m., New York City time, on August
27, 2021, unless extended by Merger Sub
Consent Solicitation Deadline
5:00 p.m., New York City time, on August
27, 2021, unless extended by Domtar
Expiration Time
Midnight (end of day), New York City time,
on October 1, 2021, unless extended or earlier terminated by Merger
Sub
Offer Payment Date
The Offer Payment Date will occur on or
promptly following the Expiration Time, subject to all conditions
to the applicable Offer having been satisfied or waived by Merger
Sub. Merger Sub intends to extend the Expiration Time with respect
to each Offer, without extending the Withdrawal Deadline (unless
required by law), to have the Offer Payment Date occur concurrently
with, or promptly after, the closing of the Merger (as defined
below).
Change of Control Consent Solicitation
Payment Date
The Change of Control Consent Solicitation
Payment Date will occur, subject to all conditions to such Domtar
Consent Solicitation having been satisfied or waived by Domtar, on
or promptly following the consummation of the Merger.
The Offers, the Offer Consent Solicitations and the Domtar
Consent Solicitations are being conducted in connection with the
pending acquisition (the “Merger”) of Domtar by the Paper
Excellence group pursuant to the Agreement and Plan of Merger,
dated as of May 10, 2021 (as amended, restated, supplemented or
otherwise modified from time to time, the “Merger Agreement”), by
and among Domtar, Paper Excellence, Karta Halten, Hervey
Investments B.V., a private limited company organized under the
laws of the Netherlands, and Merger Sub. The Offers, the Offer
Consent Solicitations and the Domtar Consent Solicitations are open
to all registered holders of the Notes.
The closing of the Merger is subject to the satisfaction or
waiver of customary conditions, including the approval or
clearance, or the expiration, termination or waiver of the waiting
periods under various antitrust laws. The Offers, the Offer Consent
Solicitations and the Domtar Consent Solicitations are made
pursuant to the Offer to Purchase, which sets forth a more detailed
description of the Offers, the Offer Consent Solicitations and the
Domtar Consent Solicitations. All capitalized terms used, but not
defined, in this press release are used as defined in the Offer to
Purchase.
Other Information
The Offers, the Offer Consent Solicitations and the Domtar
Consent Solicitations, in each case with respect to one or both
Series of Notes, may be terminated or withdrawn at any time and for
any reason, including if certain conditions described in the Offer
to Purchase are not satisfied, subject to applicable law. Merger
Sub is making the Offers and the Offer Consent Solicitations and
Domtar is making the Domtar Consent Solicitations only by, and
pursuant to, the terms of the Offer to Purchase. None of Paper
Excellence, Karta Halten, Merger Sub, Domtar, the Dealer Managers
and Solicitation Agents (as defined below), the Trustee, the tender
agent and information agent nor any of their respective affiliates
makes any recommendation as to whether or not Holders of the Notes
should (i) tender or refrain from tendering their Notes with regard
to the Offers or deliver or refrain from delivering their Notes
with regard to the Offer Consent Solicitations or (ii) deliver or
refrain from delivering their Notes with regard to the Domtar
Consent Solicitations.
This announcement does not constitute an offer to sell any
securities or the solicitation of an offer to purchase any
securities. The Offers, the Offer Consent Solicitations and the
Domtar Consent Solicitations are being made only pursuant to the
Offer to Purchase. The Offers, the Offer Consent Solicitations and
the Domtar Consent Solicitations are not being made to Holders of
Notes in any jurisdiction in which the making or acceptance thereof
would not be in compliance with the securities, blue sky or other
laws of such jurisdiction. In any jurisdiction in which the
securities laws or blue sky laws require the Offers, the Offer
Consent Solicitations and the Domtar Consent Solicitations to be
made by a licensed broker or dealer, the Offers, the Offer Consent
Solicitations and the Domtar Consent Solicitations will be deemed
to be made on behalf of Merger Sub or Domtar, as applicable, by one
or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
Barclays Capital Inc., BMO Capital Markets Corp., Credit Suisse
Securities (USA) LLC and Wells Fargo Securities, LLC are serving as
the Dealer Managers for each of the Offers and as the Solicitation
Agents for each of the Offer Consent Solicitations and the Domtar
Consent Solicitations (the “Dealer Managers and Solicitation
Agents”).
Requests for the Offer to Purchase and questions or request for
assistance in relation to the Offer and Domtar Consent
Solicitations may be directed to Global Bondholder Services
Corporation at (212) 430-3774 (for brokers and banks) or (866)
807-2200 (for all others) or email contact@gbsc-usa.com.
About Paper Excellence
Paper Excellence, a private limited company organized under the
laws of the Netherlands, is a diversified manufacturer of pulp and
paper, including printing and writing, packaging, and specialty
papers. Paper Excellence believes in the enduring value of
wood-based products in global markets and has built a large network
of mills and chipping plants to produce them competitively. Through
its distinct approach to operational excellence, Paper Excellence
delivers high-quality and cost-effective products to international
customers. Paper Excellence has grown through logical acquisitions
from a single mill to a group producing 2.8 million tonnes of paper
and pulp and employing more than 2,800 people over the past
decade.
Additional information about Paper Excellence is available at
https://paperexcellence.com/.
About Domtar
Domtar is a leading provider of a wide variety of fiber-based
products including communication, specialty and packaging papers,
market pulp and airlaid nonwovens. With approximately 6,400
employees serving more than 50 countries around the world, Domtar
is driven by a commitment to turn sustainable wood fiber into
useful products that people rely on every day. Domtar’s annual
sales are approximately $3.7 billion, and its common stock is
traded on the New York and Toronto Stock Exchanges. Domtar’s
principal executive office is in Fort Mill, South Carolina. To
learn more, visit www.domtar.com.
Forward-Looking
Statements
All statements made herein that are not historical facts should
be considered as forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such
statements involve known and unknown risks, uncertainties and other
factors that may cause actual results to differ materially. These
statements include, but are not limited to, statements regarding
the expected completion and timing of the proposed transaction
between Paper Excellence and Domtar, expected benefits and costs of
the proposed transaction, and management plans relating to the
proposed transaction, statements that address each company’s
expected future business and financial performance, statements
regarding the impact of natural disasters, health epidemics and
other outbreaks, especially the outbreak of COVID-19 since December
2019, which may have a material adverse effect on each company’s
business, results of operations and financial conditions, and other
statements identified by words such as “anticipate”, “believe”,
“expect”, “intend”, “aim”, “target”, “plan”, “continue”,
“estimate”, “project”, “may”, “will”, “should” and similar
expressions. These forward-looking statements should be considered
with the understanding that such statements involve a variety of
risks and uncertainties, known and unknown, and may be affected by
inaccurate assumptions. Consequently, no forward-looking statement
can be guaranteed and actual results may vary materially. Many
risks, contingencies and uncertainties could cause actual results
to differ materially from our forward-looking statements. Certain
of these risks are set forth in Domtar’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2020, as well as the
company’s other reports filed with the SEC.
Those risks, uncertainties and assumptions also include the
timing, receipt and terms and conditions of any required
governmental and regulatory approvals of the proposed transaction
between Paper Excellence and Domtar that could reduce anticipated
benefits or cause the parties to abandon the proposed transaction,
the occurrence of any event, change or other circumstances that
could give rise to the termination of the merger agreement, the
risk that the parties may not be able to satisfy the conditions to
the proposed transaction in a timely manner or at all, risks
related to disruption of management time from ongoing business
operations due to the proposed transaction, the risk that any
announcements relating to the proposed transaction could have
adverse effects on the market price of Domtar’s common stock, the
risk of any unexpected costs or expenses resulting from the
proposed transaction, the risk of any litigation relating to the
proposed transaction, the risk that the proposed transaction and
its announcement could have an adverse effect on the ability of
Paper Excellence or Domtar to retain customers and retain and hire
key personnel and maintain relationships with their suppliers,
customers and other business relationships and on their operating
results and businesses generally, the risk that the pending
proposed transaction could distract management of both entities and
they will incur substantial costs, the risk that the combined
company may not operate as effectively and efficiently as expected
and other important factors that could cause actual results to
differ materially from those projected. All such factors are
difficult to predict and are beyond each company’s control.
Additional factors that could cause results to differ materially
from those described above can be found in Domtar’s Annual Report
on Form 10-K for the fiscal year ended December 31, 2020, as well
as in the company’s other reports filed with the SEC.
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version on businesswire.com: https://www.businesswire.com/news/home/20210823005173/en/
Nicholas Estrela Director, Investor Relations T 514-848-5049
Domtar (NYSE:UFS)
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