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Management Side
Technical Side
Mercer International Agrees to Acquire Fibrek
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Montreal, Quebec, Canada, 10 February 2012 — Fibrek Inc. and Mercer International Inc. announced today that they have entered into a support agreement pursuant to which Mercer will offer to acquire all of the issued and outstanding common shares of Fibrek by way of a takeover bid.

The consideration to be offered for each common share of Fibrek under the Mercer offer will be, at each shareholder's option, (i) CAD 1.30 in cash; (ii) 0.1540 of a share of Mercer common stock (Mercer shares); or (iii) CAD 0.54 in cash plus 0.0903 of a Mercer share, subject to proration on the basis of a maximum of CAD 70 million in cash and approximately 11.7 million Mercer shares. Such consideration represents a premium of approximately 70% over the volume-weighted average price of the common shares of Fibrek on the Toronto Stock Exchange (TSX) for the 20 trading days ending on 28 November 2011, and a premium of 81% over the closing price the day before the announcement of the unsolicited bid of Abitibi. The consideration also represents a 30% premium over Abitibi's unsolicited bid.

"This has been a challenging time for Fibrek as we have sought to maximize value for our shareholders and advance the interests of our other stakeholders. We are pleased to support Mercer's offer and recommend it to our shareholders as we believe this offer meets our goal and provides a significant premium relative to Abitibi's unsolicited offer," said Hubert T. Lacroix, chairman of the board of directors of Fibrek.

“We had a responsibility to our shareholders to pursue alternative options in their best interests and that is exactly what we have done in supporting this offer from Mercer, a leader in the industry who is committed to market pulp,” added Pierre Gabriel Côté, president and chief executive officer of Fibrek.
“There are significant similarities between Fibrek and Mercer, given that we are both pulp producers with aculture of operational excellence,” said Côté.
The board has received a fairness opinion from its financial advisor, TD Securities Inc., that the consideration to be received under the Mercer offer is fair, from a financial point of view, to the shareholders of Fibrek (other than those who have entered into lock-up agreements with Abitibi). In addition, as previously disclosed, the board of directors also has received a formal valuation prepared by Canaccord Genuity Corp. The consideration to be offered to Fibrek shareholders by Mercer is in the fair market value range of CAD 1.25 to CAD 1.45 per common share of Fibrek established by Canaccord Genuity Corp.
Following receipt of such opinion and formal valuation, and in consultation with its legal advisors, the board of directors has unanimously determined that the consideration to be received by Fibrek shareholders under the Mercer offer is fair, from a financial point of view, to such shareholders. The board of directors has further determined that it would be in the best interests of Fibrek to support the Mercer offer and enter into the support agreement and recommend that shareholders tender their common shares to the Mercer offer.
Each of the directors and officers of Fibrek have agreed to tender all common shares held by them pursuant to lock-up agreements with Mercer.
Full details of the Mercer offer will be included in a take-over bid circular which is expected to be mailed to holders of common shares of Fibrek by 29 February 2012. Once mailed, the Mercer offer will be open for acceptance for a period of 35 days, unless withdrawn or extended, and will be conditional upon, among other things, Mercer acquiring such number of common shares that represent at least 50.1% of the outstanding common shares calculated on a fully-diluted basis, receipt of customary regulatory consents and approvals and the approval of a simple majority of Mercer's shareholders in connection with the issuance of the Mercer shares.
Mercer's two largest shareholders and chief executive officer, which hold in the aggregate approximately 44% of Mercer's outstanding shares, have already committed to support the Mercer offer and have entered into support agreements to ensure that Mercer shareholder approval is received.
Pursuant to the support agreement, Fibrek has agreed to waive the application of the shareholder rights plan to the Mercer offer and to take no action to waive the application of the shareholder rights plan to any other acquisition proposal. The support agreement entered into by Fibrek and Mercer contains, among other things, a termination fee of CAD 8.5 million payable by Fibrek in certain circumstances, including the acceptance of an unsolicited superior proposal from a third party. Mercer has also been granted a right to match in respect of competing proposals.

Mercer also has agreed to purchase 32,320,000 special warrants of Fibrek on a private placement basis, at a price of CAD 1.00 per special warrant for total subscription proceeds of CAD 32,320,000. The special warrants are convertible into common shares of Fibrek on a one-for-one basis. Conversion of the special warrants is automatic in certain events, and otherwise at the option of Mercer subject to certain conditions. The special warrants also are redeemable by Mercer or Fibrek in certain events at their subscription price, including in the event that Fibrek receives and supports a superior proposal.

The proceeds of the private placement will be deposited in trust at closing and will be releasable to Fibrek on conversion of the special warrants or to Mercer in the event of a redemption. Proceeds from the private placement are initially to be used by Fibrek to reduce net debt given (i) the recent costs associated with its strategic alternatives review process in response to Abitibi's unsolicited offer, (ii) the high level of recycled bleached kraft pulp inventories and lower than anticipated sales which have resulted in a 5-week market shutdown of the Fairmont mill, effective 20 February 2012, and an increased need for liquidity, and (iii) capital expenditures required in connection with Fibrek's power-generation initiatives and other growth and diversification opportunities. Completion of the private placement and the conversion of the special warrants is subject to a number of conditions, including the approval of the TSX, but is not conditional on the successfulcompletion of the Mercer offer. In the event the Mercer offer is not completed, the private placement willprovide Fibrek with necessary funding to continue operations and the execution of its strategic plan.

About Fibrek
Fibrek (TSX: FBK) is a leading producer and marketer of high-quality virgin and recycled kraft pulp. The company operates three mills located in Saint-Félicien, Québec, Canada, and Fairmont, West Virginia, and Menominee, Michigan, USA, with a combined annual production capacity of 760,000 metric tons. Fibrek has approximately 500 employees. The Saint-Félicien mill provides northern bleached softwood kraft pulp to various sectors of the paper industry mainly in Canada, the United States, and Europe, for use in the production of specialized products. The Fairmont and Menominee mills manufacture air-dried recycled bleached kraft pulp and primarily supply manufacturers of fine uncoated paper, tissue paper for commercial and industrial uses, and coated paperin the United States.
About Mercer
Mercer Inc. is a Washington corporation and whose shares of common stock are quoted and listed for trading on the NASDAQ Global Market (MERC) and the Toronto Stock Exchange (MRI.U).The company operates in the pulp business and is the largest publicly traded producer of market northern bleached softwood kraft pulp in the world. The company is the sole kraft pulp producer, and the only producer of pulp for resale in Germany, which is the largest pulp import marketin Europe. The company's operations are located in eastern Germany and western Canada and currently employs approximately 1039 people at its German operations, 439 people at its Celgar mill in western Canada, and 17 people at the office in Vancouver, British Columbia, Canada. Mercer operates three NBSK pulp mills with a consolidated annual production capacity of approximately 1.5 million air-dried metric tons.



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