Paper Excellence and J&F remain at odds over Eldorado deal after court ruling

SAO PAULO, July 30 (Reuters) – Canada-based Paper Excellence said it had been cleared by a Brazilian court to complete the acquisition of the outstanding shares of Brazilian pulp maker Eldorado Brasil Celulose, a statement immediately disputed by the majority shareholder of Eldorado.

The move is the latest in a long-running legal wrangle over Eldorado, dating back to an original deal signed in 2017 but never finalized. Since then, the two parties have been fighting over the price of the transaction and the right to conclude it.

In a statement late Friday, Paper Excellence said Judge Renata Maciel had agreed with an arbitration panel that ruled last year that the company, which owns 49.4% of Eldorado, could acquire the remaining stake. to reach 100%.

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He said the judge ruled the arbitration was correct in giving Paper Excellence the right to complete the acquisition and rejected arguments to the contrary by Eldorado’s majority owner, holding company J&F Investments.

The arbitration had demanded that the price of the complete transaction be 15 billion reais ($2.9 billion), as stated in the original sales contract.

However, J&F said he was “surprised” by the judge’s decision as he had obtained a ruling from an appeals court staying the trial proceedings.

In a statement, J&F – which also controls publicly traded food processor JBS SA (JBSS3.SA) – said the latest court ruling was “void” and ignores evidence regarding the arbitration proceeding.

Paper Excellence CEO in Brazil, Claudio Cotrim, said the Canadian company would consider a potential capacity expansion at Eldorado, based in the midwestern state of Mato Grosso do Sul.

Since the acquisition of Eldorado, signed in 2017 but never finalized, Paper Excellence has taken control of the American companies Resolute Forest Products and Domtar. In 2019, she purchased Canada’s Catalyst Paper.

($1 = 5.1724 reais)

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Reporting by Tatiana Bautzer; Editing by David Holmes

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