Investment funds managed by Oaktree Capital Management, L.P.
(“Oaktree”), which beneficially own 19.9% of the common stock of Tembec
Inc. (“Tembec”), today announced that they fully support the proposed
acquisition of Tembec by Rayonier Advanced Materials Inc. (“Rayonier
Advanced Materials”) (the “Transaction”) on the revised terms announced
yesterday by Rayonier Advanced Materials and Tembec, and have committed
to vote in favor of the Transaction at the upcoming special meeting of
Pursuant to a voting and support agreement entered into with Rayonier
Advanced Materials, Oaktree has irrevocably agreed to vote all of the
Tembec common shares held by Oaktree’s investment funds and entitled to
vote in favor of the Transaction. Oaktree encourages all Tembec
shareholders to vote FOR the Transaction.
“We appreciate the constructive engagement we have had with Rayonier
Advanced Materials and are pleased that its Board has responded with
this higher offer price – we now fully support the transaction,” said
Patrick McCaney, Managing Director and Portfolio Manager for Oaktree’s
Value Equity strategy. “The revised offer presents compelling value to
Tembec shareholders and enables shareholders to participate in the
significant value creation opportunity of the combined entity.”
The increased consideration represents a 17% increase in equity value
relative to the terms of the original agreement and a premium of 61% to
Tembec’s closing price on May 24, 2017, the day immediately before the
initial announcement concerning the Transaction.
Davies Ward Phillips & Vineberg LLP served as legal advisor, Sard
Verbinnen & Co served as strategic communications advisor and Kingsdale
Advisors served as strategic shareholder, communications and proxy
advisor to Oaktree.
About Oaktree Capital Management, L.P.
Oaktree is a leader among global investment managers specializing in
alternative investments, with $100 billion in assets under management as
of March 31, 2017. The firm emphasizes an opportunistic, value-oriented
and risk-controlled approach to investments in distressed debt,
corporate debt (including high yield debt and senior loans), control
investing, convertible securities, real estate and listed equities.
Headquartered in Los Angeles, the firm has over 900 employees and
offices in 18 cities worldwide.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Canadian securities laws, Section 27A of the U.S.
Securities Act of 1933 and Section 21E of the U.S. Securities Exchange
Act of 1934. In some cases, you can identify forward-looking statements
by words such as “anticipate,” “approximately,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,”
“potential,” “predict,” “seek,” “should,” “will” and “would” or the
negative version of these words or other comparable or similar words.
These statements identify prospective information, and are based on the
current expectations of Oaktree, estimates Oaktree considers reasonable
and information currently available to Oaktree. Because forward-looking
statements include risks and uncertainties, actual results may differ
materially from those expressed or implied. Risks and uncertainties
include, but are not limited to, those discussed in the Tembec circular
(including the factors listed in the section captioned “Risk Factors” on
page 78), Tembec’s other filings (accessible on the SEDAR website at www.sedar.com)
and Rayonier’s filings with the SEC (accessible on the SEC’s website at www.sec.gov),
integration risk, consensus analyst estimates, currency exchange risk,
risks associated with indebtedness, customer retention risk,
expectations respecting Tembec’s and Rayonier’s prospects for growth,
profitability and debt reduction, availability of synergies,
achievability of tax savings, and cellulose and acetate market
Forward-looking statements speak only as of the date of this press
release. Except as required by law, Oaktree does not undertake any
obligation to publicly update or review any forward-looking statement,
whether as a result of new information, future developments or
otherwise. Any financial outlook information contained in this press
release about prospective results of operations, financial position or
cash flows is based on assumptions about future events including
economic conditions and proposed courses of action, based on Oaktree’s
assessment of the relevant information currently available. Readers are
cautioned that such financial outlook information contained in this
press release should not be used for purposes other than for those for
which it is disclosed herein.
Information in Support of Public Broadcast Solicitation
Oaktree is relying on the exemption under section 9.2(4) of National
Instrument 52-102 – Continuous Disclosure Obligations to make this
public broadcast solicitation. The following information is provided in
accordance with corporate and securities laws applicable to public
This solicitation is being made by Oaktree and investment funds managed
by Oaktree (excluding Oaktree, the “Oaktree Funds”), and not by or on
behalf of the management of Tembec.
The address of Tembec is 100-4 Place Ville-Marie, Montréal, Québec, H3B
Proxies for the Tembec shareholders meeting may be solicited by mail,
telephone, facsimile, email or other electronic means as well as by
newspaper or other media advertising and in person by managers,
directors, officers and employees of Oaktree who will not be
specifically remunerated therefor. In addition, Oaktree may solicit
proxies in reliance upon the public broadcast exemption to the
solicitation requirements under applicable Canadian corporate and
securities laws, conveyed by way of public broadcast, including press
release, speech or publication, and by any other manner permitted under
applicable Canadian laws. Oaktree may engage the services of one or more
agents and authorize other persons to assist it in soliciting proxies on
behalf of Oaktree and the Oaktree Funds.
Oaktree has entered into an agreement with Kingsdale Advisors
(“Kingsdale”) pursuant to which Kingsdale has agreed that it will act as
Oaktree’s strategic shareholder, communications and proxy agent.
Pursuant to this agreement Kingsdale will receive a fee of up to
approximately $220,000 plus disbursements.
All costs incurred for the solicitation will be borne by the Oaktree
In addition to revocation in any other manner permitted by Law, any
Tembec shareholder executing a proxy form may revoke it at any time, as
long as it has not been exercised, by an instrument in writing executed
by such shareholder or his attorney authorized in writing and deposited
either at the head office of Tembec at 100-4 Place Ville-Marie,
Montréal, Québec, H3B 2E7 at any time up to and including the last
business day preceding the date of the Tembec shareholders meeting on
July 27, 2017, or any adjournment or postponement thereof, or with the
chair of the Tembec shareholders meeting on the day of such meeting or
any adjournment or postponement thereof. For any Tembec shareholder
holding shares through an intermediary, the methods to revoke a proxy
may be different, and such shareholder should carefully follow the
instructions provided by such intermediary.
Neither Oaktree, the Oaktree Funds, nor any of their managing members,
directors or officers, or any associates or affiliates of the foregoing,
has: (i) any material interest, direct or indirect, in any transaction
since the beginning of Tembec’s most recently completed financial year
or in any proposed transaction that has materially affected or would
materially affect Tembec or any of its subsidiaries; or (ii) any
material interest, direct or indirect, by way of beneficial ownership of
securities or otherwise, in any matter currently known to be acted on at
the upcoming meeting of Tembec shareholders, other than the proposed
transaction between Tembec and Rayonier Advanced Materials Inc.
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