Oaktree Announces Support for Rayonier Advanced Materials’ Acquisition of Tembec at Revised Price

Increased Consideration is Valued at C$4.75

Urges Other Tembec Shareholders to Vote in Favor of the Transaction

LOS ANGELES--()--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 Tembec shareholders.

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 conditions.

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 broadcast solicitations.

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 2E7.

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 Funds.

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.

Contacts

Media:
Sard Verbinnen & Co
John Christiansen / David Millar
(415) 618-8750 / (212) 687-8080
jchristiansen@sardverb.com / dmillar@sardverb.com
or
Kingsdale Advisors
Ian Robertson
Direct: 416-867-2333/Cell: 647-621-2646
irobertson@kingsdaleadvisors.com

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