Rottneros halt was due to a recommended offer

The Board of Swedish pulp maker Rottneros (STO: RROS) is supporting a public offer from integrated pulp and fine paper group Arctic Paper S.A (WAR: ATC). The offer is either as a share conversion or a corresponding cash consideration for shares held as of 2 November 2012. It values Rottneros around 351 million SEK. If all shares were converted into shares of the new entity, Rottneros owners would have a 34% stake in the new company.

It was said that Rottneros’ Board and Arctic Paper have been talking for a long time, so the comments yesterday claiming the company was in the dark were smoke and mirrors. Arctic Paper has already been allowed to conduct some limited due diligence. It believes the combination makes a lot of sense towards "creating a European pulp and fine paper industry leader". Obviously in the mean time it would still remain a relatively small player. The units should be very synergistic, up to 80 million SEK per year, and mitigate the business cycle effects that the company faces.

Rottneros’ largest shareholder Nemus Holding AB intends to accept the offer. The transaction would involve Arctic Paper seeking a secondary listing in Stockholm. The Warsow, Poland listed firm has mills of Grycksbo and Munkedal in Sweden, Kostrzyn and Odra Poland and Mochenwangen in Germany and can trace its roots to Swedish Trebruk AB. Offer conditions include a 90% acceptance, regulatory approval needs and other customary matters.