SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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Filed by the Registrant /X/
Filed by a party other than the Registrant / /
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/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-12
MERCER INTERNATIONAL INC.
(Name of Registrant as Specified in its Charter)
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/X/ No fee required.
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Rule 0-11(a)(2) and identify the filing for which the offsetting fee
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FOR: MERCER INTERNATIONAL INC.
APPROVED BY: Jimmy S.H Lee
Chairman, Chief Executive
Officer & President
(41) 43 344-7070
FOR IMMEDIATE RELEASE
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FD Morgen-Walke
Investors: Eric Boyriven
Media: Jeffrey Zack
(212) 850-5600
MERCER REJECTS GREENLIGHT'S MISLEADING CAMPAIGN
TO APPOINT ITS HAND-PICKED AGENTS
NEW YORK, New York, July 7, 2003 - Mercer International Inc. ("Mercer")
(Nasdaq: MERCS, TSX: MRI.U, Nasdaq-Europe: MERC GR) urged its shareholders not
to be mislead by hedge fund Greenlight Capital Inc.'s disingenuous campaign to
have its hand-picked agents take over control of part of the Company's Board of
Trustees at this critical time.
Jimmy S.H. Lee, the Chief Executive Officer of Mercer, commented: "Using
the guise of a purported governance concern, Greenlight claims that two
independent trustees need to be elected. Your Board had already advised
Greenlight that it would utilize an independent search firm to search for two
qualified independent trustees to be added to the Board. This proposal was
rejected by Greenlight who wanted the sole right to veto any new trustees."
Mr. Lee added: "Greenlight's actions are not in the best interests of
shareholders. Greenlight does not want independent, qualified trustees but, in
fact, wants hand-picked agents who are extremely well compensated by Greenlight
to pursue its own agenda."
Mr. Lee concluded: "Greenlight's actions have resulted in our plan to
Refinance two bridge loans incurred with the Stendal project, which is currently
the most important issue facing the Company, to be put on hold without
disclosing an alternative for such refinancing or its strategy for the
Company. We are disappointed by the opportunistic actions by one shareholder
at this critical time in our Company's evolvement and urge shareholders to vote
for management's nominees, Per Gundersby and Michel Arnulphy, at the upcoming
shareholders' meeting on August 22, 2003."
Mercer also announced that the following letter is being mailed to its
Valued shareholders.
July 7, 2003
Dear Valued Shareholders:
DO NOT BE MISLEAD - HEDGE FUND, GREENLIGHT CAPITAL INC., WANTS TO APPOINT ITS
HAND-PICKED AGENTS, NOT INDEPENDENT TRUSTEES.
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Greenlight wishes to have its hand-picked agents take over control of a
part of your Board of Trustees at this critical time in the Company's
evolvement. Using the guise of a purported governance concern, Greenlight
claims that independent trustees are required. Your Board of Trustees has
already advised Greenlight that it wished to expand the Board and utilize an
independent search firm to add two qualified, independent trustees. This
proposal was rejected by Greenlight who wished to have sole veto rights over any
new trustees. Greenlight's actions clearly demonstrate that Greenlight is not
interested in independent trustees being added to the Board but only with its
hand-picked agents taking over control of part of the Board to pursue its own
agenda.
GREENLIGHT ACTION PUTS CRITICAL REFINANCING ON HOLD WITH NO DISCLOSED
ALTERNATIVE.
The Company is going through the most critical point of its evolvement. It
is in the middle of a E1 billion construction project to build a new pulp mill
at Stendal and needs to refinance (the "Refinancing") two bridge loans which,
with accrued interest and fees, total approximately E54.4 million as at May 31,
2003 and mature commencing October 2003. As a result of Greenlight's actions,
which appear to be deliberately designed to derail or delay the Refinancing, the
Board has been forced to put it on hold. In the event the Company does not
complete the Refinancing, it will be in default under the bridge loans. This
could well trigger default on other debt obligations. Greenlight has not
disclosed any plan or its alternative regarding the Company's short-term
requirements to complete the Refinancing.
WHOSE INTEREST WILL GREENLIGHT'S AGENTS REPRESENT GIVEN THEIR RICH COMPENSATION
FROM GREENLIGHT?
Greenlight's hand-picked agents are being extremely well compensated by
Greenlight. Each of them will be paid over three-to-five times what our other
trustees are paid, receive directly and through affiliates "in-the-money" stock
options on an aggregate of 375,000 Mercer shares and be indemnified by
Greenlight. In these circumstances, shareholders must ask - whose interest will
the Greenlight agents represent? - the person paying them or all shareholders?
GREENLIGHT'S AGENTS LACK QUALIFICATION.
Greenlight's two hand-picked agents, Guy Adams and Saul Diamond, by their
own admission have no corporate experience, no experience in the pulp and paper
industry, no international or European business experience and no board level
experience in public companies with the complexity of Mercer. According to
Greenlight's own proxy materials, Messrs. Adams and Diamond between the two of
them collectively have less than one year's aggregate experience as directors of
public companies.
One of Greenlight's agents, Guy Adams, was in June 2001 found by the U.S.
District Court for the District of Kansas to have violated U.S. federal
securities laws by making false and misleading statements in his proxy materials
to solicit votes for election to the board of Lone Star Steakhouse and Saloon
Inc. The Court issued an injunction requiring Guy Adams to make corrective
disclosure. Shareholders should question - Is the apparent lack of relevant
experience and independence from Greenlight why Greenlight refused the Board's
proposal to use an independent search firm to add two qualified, independent
trustees?
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OUR SHARE PRICE TRACKS UNDERLYING PULP PRICES.
Greenlight uses the usual rhetoric of almost all dissidents seeking control
of a board of directors - complaining about recent share price performance.
Such rhetoric is unjustified in that the Company's primary product is pulp which
is largely a commodity product, subject to wide price fluctuations. It is well
known and accepted by investors, analysts and the investment community that the
shares of pulp producers trade relative to the underlying commodity price. As a
result, Mercer's share price performance tracks the underlying commodity pulp
price. When compared to its peer group in the pulp industry, Mercer's share
price has performed well.
WHAT IS GREENLIGHT'S AGENDA?
In its proxy materials, Greenlight acknowledges Mercer's excellent assets
and apparently accepts Mercer's strategy and business plan. These assets were
assembled by the current management and Board of Mercer who have focused on a
long-term strategy and business plan to enhance shareholder value. Since
Greenlight apparently agrees with the strategic positioning and direction of
Mercer, shareholders should question why Greenlight jeopardized the Refinancing
without an alternative plan, wishes to appoint two handsomely paid, hand-picked
agents without apparent relevant experience as trustees and wishes to risk the
future execution of management's plans at such a critical time. What is
Greenlight's agenda?
FOCUS ON BUILDING SHAREHOLDER VALUE - NOT ON RHETORIC, INNUENDO AND MUD-SLINGING
Management and the Board have focused on a long-term strategy to enhance
shareholder value by creating a leading low-cost, efficient producer of
primarily pulp. The Company is in the middle of a E1 billion construction
project to complete the Stendal pulp mill which will position it as one of the
largest global market pulp producers.
Coincident with its evolvement from a small entrepreneurial enterprise to,
when the Stendal project is completed, a leading global market pulp producer,
the Board has recently taken a number of initiatives to enhance investor
confidence, broaden its investor base and enhance governance practices to
reflect its growth. These include, among other things, appointing a "big four"
accounting firm as its new auditor, voluntarily adopting a code of business
conduct and ethics, adopting a new audit committee charter, obtaining a listing
of its shares on The Toronto Stock Exchange to increase liquidity and analyst
and shareholder exposure, engaging a leading North American investment bank to
lead a private placement of securities to effect the Refinancing and seeking to
expand the size of the Board by adding two additional independent, qualified
trustees.
Since Greenlight acknowledges Mercer's excellent assets and apparently
accepts its long-term strategy, it has had to resort to rhetoric, innuendo and
veiled aspersions on management to advance its own agenda. Management and the
Board disagrees with a number of the statements and unjustified aspersions set
forth in the Greenlight materials, many of which have been previously addressed.
Without trying to reply to all of them, the Company does note that:
(i) the shareholders' meeting has been rescheduled to August 22, 2003 so
that current shareholders have sufficient information and time to
make a fully informed
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decision. Such a delay is in the best interests of all current
shareholders, including Greenlight. Greenlight's proxy materials
disclose that it did not intend to commence mailing the same to
shareholders until July 7, 2003. This would have left little or
no time for the mailing of its proxy materials, receipt and
forwarding by securities intermediaries, the obtaining of shareholder
instructions and the return of proxies in time for a meeting
initially scheduled for July 15, 2003 in Germany. This is a
critical issue facing the shareholders and your Board believes all
shareholders should have a full and fair opportunity to consider the
issues and make an informed decision;
(ii) Greenlight has taken now to using purported quotes from a so-called
local "trade" paper that are many years old to somehow improperly
cast aspersions on the Company. The Company believes that such
attempted mud-raking does not contribute to enhancing shareholder
value and, despite reports in leading international financial
newspapers regarding Greenlight, does not intend to reciprocate in
kind.
At the end of the day, your Board, management and shareholders must focus
on the creation of value. Management and the Board have a long-term strategy to
deliver such value. The most important features of the strategy are, in the
very short term, completing the Refinancing and successfully bringing the
Stendal project online. These are the two items that will create value for
shareholders. Rhetoric, innuendo and mud-slinging will provide no value
creation.
WE URGE YOU TO VOTE FOR MANAGEMENT'S NOMINEES:
PER GUNDERSBY AND MICHEL ARNULPHY
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HOW TO VOTE
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN.
1. If your shares are registered in your own name, please sign, date and mail
the WHITE Proxy Card to Georgeson Shareholder Communications Inc.
2. If your shares are held in the name of a brokerage firm, bank nominee or
other institution, only it can sign a WHITE Proxy Card with respect to your
shares and only after receiving your specific instructions. Accordingly,
please sign, date and mail the WHITE Proxy Card, and to ensure that your
shares are voted, you should also contact the person responsible for your
account and give instructions for a WHITE Proxy Card to be issued
representing your shares.
3. After signing the WHITE Proxy Card, do not sign or return the Green proxy
card. Remember - only your latest dated proxy will determine how your shares
are to be voted at the Meeting. IF YOU VOTED A GREEN PROXY CARD AND WANT TO
CHANGE YOUR VOTE, YOU CAN DO SO NOW BY SENDING IN A WHITE PROXY CARD.
PLEASE VOTE THE WHITE PROXY CARD. PLEASE DO NOT RETURN ANY GREEN PROXY CARD
FOR ANY REASON. ONLY YOUR LATEST PROXY CARD WILL BE COUNTED. IF YOU HAVE ANY
QUESTIONS, PLEASE CALL OUR PROXY SOLICITOR OR OUR INVESTOR RELATIONS AGENT:
GEORGESON SHAREHOLDER FD MORGEN-WALKE
COMMUNICATIONS INC. 380 LEXINGTON AVENUE, 50TH
17 STATE STREET, 10TH FLOOR FLOOR
NEW YORK, NY 10004 NEW YORK, NY 10168
Shareholders call toll free: (800) 293-6057 Phone: (212) 850-5600
Banks and brokerage firms, please call collect: Shareholders: Eric Boyriven
(212) 440-9800 Media: Jeffrey Zack
If you have any questions regarding Mercer, please call Jimmy S.H. Lee,
Chairman, President and CEO, at (41) 43 34 7070.
We thank you for your consideration and continued support.
Sincerely,
/s/ Jimmy S.H. Lee
Jimmy S.H. Lee
Chairman, President and CEO
Mercer International Inc.
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FORWARD-LOOKING STATEMENT
Certain statements in this letter may constitute forward-looking statements.
They are based on management's current expectations and could be affected by
numerous factors and are subject to various risks and uncertainties. Certain of
those risks and uncertainties are discussed in the Company's filings with the
SEC, including the Company's annual report on Form 10-K and quarterly reports on
Form 10-Q. Do not rely on any forward-looking statement, as we cannot predict
or control many of the factors that ultimately may affect our ability to achieve
the results estimated. We make no promise to update any forward-looking
statement, whether as a result of changes in underlying factors, new
information, future events or otherwise.
ABOUT MERCER INTERNATIONAL INC.
Mercer International Inc. is a European pulp and paper manufacturing
company.
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