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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 24, 1998
BOWATER INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 1-8712 62-0721803
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
55 East Camperdown Way
Greenville, SC 29601
(address of principal executive offices)
Registrant's telephone number, including area code: (864) 271-7733
N/A
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to an Amended and Restated Arrangement Agreement (the
"Arrangement Agreement") dated as of March 9, 1998, between Bowater
Incorporated ("Bowater") and Avenor Inc. ("Avenor"), at 12:01 a.m.
(Montreal time) on July 24, 1998, Bowater, through two newly-incorporated
subsidiaries, Bowater Canadian Holdings Incorporated, a Nova Scotia
corporation, and Bowater Canada Inc., a Canadian corporation ("Bowater
Canada"), acquired 100% of the outstanding common shares (the "Avenor
Common Shares") of Avenor under a plan of arrangement (the "Arrangement")
effected under the Canadian Business Corporations Act. Under the
Arrangement, each holder of an Avenor Common Share was entitled to receive
for such share, at such holder's election, subject to proration, (i) C$35
in cash, without interest thereon, (ii) .482053 shares of common stock (the
"Bowater Common Stock") of Bowater, (iii) .482053 exchangeable shares (the
"Exchangeable Shares") of Bowater Canada or (iv) a combination of the
foregoing. The proration provisions under the Arrangement operated to
reduce the number of Avenor Common Shares exchanged for shares of Bowater
Common Stock and/or Exchangeable Shares to approximately 82 percent of the
Avenor Common Shares with respect to which elections for shares of Bowater
Common Stock and/or Exchangeable Shares were originally made or deemed to
be made. Cash was paid in lieu of fractional shares. The aggregate
consideration payable to holders of Avenor Common Shares consisted of
12,301,286 shares of Bowater Common Stock, 3,773,547 Exchangeable Shares
and C$1,167,202,545.
Pursuant to the First Supplemental Indenture dated as of July 24,
1998, among Avenor, Bowater Canada, Bowater and the Montreal Trust Company,
as trustee, with respect to the 7.50% Convertible Unsecured Subordinated
Debentures due 2004 of Avenor (the "Convertible Debentures"), holders of
Convertible Debentures who did not convert their Convertible Debentures
prior to the Arrangement are entitled to convert their Convertible
Debentures thereafter into either (i) 2.191 Exchangeable Shares per C$100
principal amount of Convertible Debentures or (ii) C$79.54 plus 1.0955
Exchangeable Shares per C$100 principal amount of Convertible Debentures.
In addition, pursuant to the Supplemental Indenture, Bowater and Bowater
Canada have fully and unconditionally guaranteed the obligations of Avenor
under the Supplemental Indenture with respect to the Convertible
Debentures, and Avenor and Bowater Canada have entered into a Debenture
Support Agreement in connection with this guarantee.
The aggregate cash consideration paid in connection with the
Arrangement, together with the fees, expenses and other cash costs, was
financed through Bowater's working capital and borrowings by Bowater under
two unsecured credit facilities in an aggregate amount of up to US$1
billion pursuant to two credit agreements each dated as of June 24, 1998,
among Bowater, The Chase Manhattan Bank, as Administrative Agent, and the
lenders signatory thereto.
A copy of the press release issued by Bowater on July 24, 1998,
with respect to effectiveness of the Arrangement is attached hereto as
Exhibit 99.1 and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial statements of businesses acquired:
Previously reported
(b) Pro forma financial information:
Previously reported
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(c) Exhibits:
Exhibit
No. Description
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2.1 Amended and Restated Arrangement Agreement
dated as of March 9, 1998, among Bowater
Incorporated and Avenor Inc. (incorporated by
reference to Annex D of the Joint Management
Information Circular and Proxy Statement of
Bowater Incorporated filed on Schedule 14A on
June 18, 1998).
99.1 Press Release issued by Bowater Incorporated
on July 24, 1998.
99.2 First Supplemental Indenture dated as of July
24, 1998, among Avenor Inc., Bowater
Incorporated, Bowater Canada Inc. and
Montreal Trust Company, as trustee, with
respect to the 7.50% Convertible Unsecured
Subordinated Debentures due 2004 of Avenor
Inc. (incorporated by reference to Exhibit
4.7 of the Registration Statement on Form S-3
(File No. 333-57838) of Bowater
Incorporated).
99.3 Debenture Support Agreement dated as of July
24, 1998, between Avenor Inc. and Bowater
Canada Inc. (incorporated by reference to the
Schedule 13D filed on August 3, 1998, by
Bowater Incorporated, Bowater Canadian
Holdings Incorporated and Bowater Canada Inc.
with respect to the common shares of Avenor
Inc.).
99.4 364-Day Credit Agreement dated as of June 24,
1998, among Bowater Incorporated, The Chase
Manhattan Bank, as Administrative Agent and
the lenders signatory thereto (incorporated
by reference to the Schedule 13D filed on
August 3, 1998, by Bowater Incorporated,
Bowater Canadian Holdings Incorporated and
Bowater Canada Inc. with respect to the
common shares of Avenor Inc.).
99.5 Five-Year Credit Agreement dated as of June
24, 1998, among Bowater Incorporated, The
Chase Manhattan Bank, as Administrative
Agent, and the lenders signatory thereto
(incorporated by reference to the Schedule
13D filed on August 3, 1998, by Bowater
Incorporated, Bowater Canadian Holdings
Incorporated and Bowater Canada Inc. with
respect to the common shares of Avenor Inc.).
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date: August 7, 1998 BOWATER INCORPORATED
By: /s/ Wendy C. Shiba
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Name: Wendy C. Shiba
Title: Vice President, Secretary and
Assistant General Counsel
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EXHIBIT INDEX
The following exhibits are filed herewith:
Exhibit
No. Description
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2.1 Amended and Restated Arrangement Agreement
dated as of March 9, 1998, among Bowater
Incorporated and Avenor Inc. (incorporated by
reference to Annex D of the Joint Management
Information Circular and Proxy Statement of
Bowater Incorporated filed on Schedule 14A on
June 18, 1998).
99.1 Press Release issued by Bowater Incorporated
on July 24, 1998.
99.2 First Supplemental Indenture dated as of July
24, 1998, among Avenor Inc., Bowater
Incorporated, Bowater Canada Inc. and
Montreal Trust Company, as trustee, with
respect to the 7.50% Convertible Unsecured
Subordinated Debentures due 2004 of Avenor
Inc. (incorporated by reference to Exhibit
4.7 of the Registration Statement on Form S-3
(File No. 333-57838) of Bowater
Incorporated).
99.3 Debenture Support Agreement dated as of July
24, 1998, between Avenor Inc. and Bowater
Canada Inc. (incorporated by reference to the
Schedule 13D filed on August 3, 1998, by
Bowater Incorporated, Bowater Canadian
Holdings Incorporated and Bowater Canada Inc.
with respect to the common shares of Avenor
Inc.).
99.4 364-Day Credit Agreement dated as of June 24,
1998, among Bowater Incorporated, The Chase
Manhattan Bank, as Administrative Agent and
the lenders signatory thereto (incorporated
by reference to the Schedule 13D filed on
August 3, 1998, by Bowater Incorporated,
Bowater Canadian Holdings Incorporated and
Bowater Canada Inc. with respect to the
common shares of Avenor Inc.).
99.5 Five-Year Credit Agreement dated as of June
24, 1998, among Bowater Incorporated, The
Chase Manhattan Bank, as Administrative
Agent, and the lenders signatory thereto
(incorporated by reference to the Schedule
13D filed on August 3, 1998, by Bowater
Incorporated, Bowater Canadian Holdings
Incorporated and Bowater Canada Inc. with
respect to the common shares of Avenor Inc.).
Exhibit 99.1
[Bowater Logo] Bowater Incorporated
Deborah L. Humphrey
Director of Corporate Communications
55 East Camperdown Way
Post Office Box 1028
Greenville, SC 29602-1028
Phone: 864/282-9571
Fax: 864/282-9594
For Additional Information Contact:
Analyst contact:
James H. Dorton
(864) 282-9500
FOR IMMEDIATE RELEASE
FRIDAY, JULY 24, 1998
BOWATER COMPLETES AVENOR ACQUISITION
GREENVILLE, SC - Bowater Incorporated (NYSE:BOW) announced today that it
has completed the acquisition of Avenor Inc. for C$3.54 billion (US$2.37
billion) in total consideration, including assumed debt. In the aggregate,
50 percent will be paid in cash and 50 percent in stock. The acquisition
price represented C$35.00 (US$23.46) per Avenor common share.
Bowater Incorporated, headquartered in Greenville, SC, is a global leader
in newsprint, and also makes coated and uncoated groundwood papers,
bleached kraft pulp and lumber products. With the completion of Avenor
acquisition, it has 12 pulp and paper mills in the United States, Canada
and Korea. These operations are supported by more than 4 million acres of
timberlands owned in the United States and Canada and over 18 million acres
of timber cutting rights in Canada. Bowater common stock is listed on the
New York Stock Exchange, U.S. regional exchanges and the London Stock
Exchange. A special class of stock exchangeable into Bowater shares has
been approved for listing on the Toronto and Montreal exchanges.
# # #
Please see attached addendum.
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Bowater Incorporated, headquartered in Greenville, SC, is a global leader
in newsprint, and also makes coated and uncoated groundwood papers,
bleached kraft pulp and lumber products. With the completion of Avenor
acquisition, it will have 12 pulp and paper mills in the United States,
Canada and Korea. These operations are supported by more than 4 million
acres of timberlands owned in the United States and Canada and over 18
million acres of timber cutting rights in Canada. Bowater common stock is
listed on the New York Stock Exchange, U.S. regional exchanges and the
London Stock Exchange. A special class of stock exchangeable into Bowater
shares will be listed on the Toronto and Montreal exchanges.
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