March 20 (Reuters) - Fibrek Inc said the Toronto Stock Exchange approved the private placement of special warrants to friendly bidder Mercer International, a move that could make it difficult for hostile bidder AbitibiBowater to win required support.
The private placement of 32.32 million was part of Mercer's offer of about C$170 million, which is 30 percent higher than Abitibi's.
All these warrants can be converted to shares on a one-for-one basis, potentially increasing the number of outstanding shares of Fibrek by about 25 percent.
Abitibi, which operates under the business name Resolute Forest Products, has about 46 percent of the Fibrek's total shares tendered in its favor by the pulp producer's biggest shareholders, including Prem Watsa-headed Fairfax Financial Holdings and Pabrai Investment Funds.
Since Abitibi's offer is hostile, it needs 66.67 percent of Fibrek's shares tendered in its favor while Mercer needs 50.1 percent.
On Monday, the Québec Court of Appeal granted Abitibi permission to appeal the Court of Québec's decision that had overturned the Bureau de decision et de revision's decision to block Fibrek's private placement of warrants to Mercer.
The appeal will be heard on March 22.