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Management Side
Technical Side
Third Avenue Management to Make Tender Offer to Catalyst Paper Corporation Shareholders
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New York, New York, USA, 25 July 2006 -- /PRNewswire/ -- David Barse, president and chief executive officer of Third Avenue Management LLC (TAM), announced that TAM intends to file a circular announcing a public general tender offer to all shareholders of Catalyst Paper Corporation (CTL.TO), for up to 39,000,000 shares or 18.17% of the outstanding common shares, at a price of CDN 3.30 per share.

Any number of shares tendered to the offer, up to the maximum, will be purchased. The offer will be made for the benefit of certain of its investment advisory clients who will be the beneficial owners of the shares acquired under the bid. The bid would result in TAM's investment advisory clients owning 37.98% of the outstanding shares when the shares subject to the bid are aggregated with existing holdings. The offer represents a 21.1% premium to Catalyst's 20-day volume weighted average price.

TAM, an investment adviser to mutual funds, private, and institutional clients, has been investing in Catalyst on behalf of its clients since 2005. TAM manages its clients' accounts, including the Third Avenue International Value Fund (TAVIX), using a value investing approach that seeks long-term capital appreciation.

Due to the size of the accounts TAM manages, and the availability of Catalyst shares at attractive valuations, TAM has purchased, on behalf of its clients, a substantial shareholding of Catalyst. Third Avenue International Value Fund, together with other client accounts managed by TAM, currently beneficially owns 42,503,313 shares, representing approximately 19.8% of the issued and outstanding shares. TAM exercises control or direction over the shares as portfolio manager.

Purpose of the Offer

Canadian securities laws mandate that a shareholder cannot accumulate 20% or more of the voting or equity shares of a company (except pursuant to certain limited exemptions) without making a public bid open to all shareholders.

The purpose of the offer is to increase the investment made in Catalyst shares by TAM, on behalf of its clients, while complying with Canadian securities laws by making a general offer open to all Catalyst shareholders. Given the size of the accounts that TAM manages, TAM believes that the appropriate exposure for an investment in Catalyst can only be achieved by acquiring a substantial number of additional shares.

Plans for Catalyst

TAM has no current plans for changes in the business or operations of Catalyst if the offer is successful. "Based on publicly available information, we consider the current configuration of the operations and finances of Catalyst to be appropriate, and do not intend to advocate material asset disposals, plant shutdowns, or unusual dividend payments. We do not intend to seek a buyer for the company," stated Amit Wadhwaney, Portfolio Manager of the Third Avenue International Value Fund, who previously worked in the Canadian pulp and paper industry for more than a decade. "Further, as a fellow Canadian, I recognize the importance of Catalyst Paper as an employer and contributor to the prosperity of the city of Vancouver and the province of British Columbia," he said.

About the Offer

The offer will be subject to a number of conditions, including no material adverse change in the business, operations, or financial condition of Catalyst and the receipt of all applicable regulatory approvals.

TAM has retained Genuity Capital Markets to act as its financial adviser in connection with the offer.

TAM intends to arrange for the Offer to be made through an acquisition vehicle that will purchase the shares and immediately distribute them to the participating client accounts. TAM derives its authority from existing investment advisory agreements, and has obtained express authorization from its clients to proceed with the offer. For purposes of the offer, the Offeror, TAM, Third Avenue International Value Fund, Third Avenue Small-Cap Value Fund, and Third Avenue Variable Series Trust may be deemed or treated as acting jointly or in concert in connection with the offer. This statement does not constitute an admission that, for legal purposes, these funds are joint actors with TAM or the Offeror.

TAM intends to cause the Offeror to mail the formal offer as soon as reasonably possible following delivery to it by Catalyst of its shareholder list.

TAM is ceasing to file alternative monthly reports for Catalyst under Part 4 of National Instrument 62-103 of the Canadian securities regulations. Because TAM now intends to make a formal bid for shares of Catalyst, it is disqualified from filing alternative monthly reports under Part 4 of that National Instrument. TAM is now required to file reports under the early warning requirements of section 101(1) and (2) of the Securities Act (Ontario) and under comparable provisions of other provincial and territorial securities laws. TAM will also make required filings under United States securities laws.

Subject to compliance with applicable securities laws, TAM or the Offeror may acquire additional shares in the market during the course of the offer for the benefit of its client accounts. After the expiration of the offer, and subject to compliance with applicable securities laws, TAM may acquire control or direction over additional shares, may sell shares or may cease to exercise discretion over shares.

About TAM

TAM is an investment advisory firm that offers its services to mutual funds, and private and institutional clients. TAM adheres to a disciplined bottom-up value investment strategy to identify investment opportunities in undervalued securities of companies with high quality assets, understandable businesses, and strong management teams that have the potential to create value over the long term. TAM has approximately CAD 23 billion in assets under management and offers value-oriented strategies, including mutual funds, separate accounts, and alternative investment vehicles.

Third Avenue International Value Fund: TAVIX
Third Avenue Small-Cap Value Fund: TASCX
Third Avenue Variable Series Trust
Catalyst Paper Corporation: CTL.TO

Third Avenue funds are offered in the United States by prospectus only and are not qualified for distribution in Canada. Prospectuses contain more complete information on advisory fees, distribution charges, and othere expenses.

Source: Third Avenue Management LLC


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