fyi
---------------------- Forwarded by Tanya Rohauer/HOU/ECT on 08/30/2000 12:51 
PM ---------------------------
   


From:  Tanya Rohauer                                                          
   08/29/2000 07:15 AM	
	
	
	                           
	

To: William S Bradford/HOU/ECT@ECT
cc:  
Subject: repap


UPM-KYMMENE TO ACQUIRE REPAP

Helsinki, Finland and Stamford, Connecticut, (August 29, 2000) ) UPM-Kymmene 
Corporation (Helsinki Stock Exchange: UPM1V; NYSE:UPM) and Repap Enterprises 
Inc. (TSE:RPP) today announced that they have signed an acquisition agreement 
under which UPM-Kymmene will acquire Repap in a transaction to be effected by 
way of an amalgamation. Pursuant to the agreement, Repap,s shareholders will 
receive CAD 0.20 per common share, which represents a premium of 
approximately 100% over the recent trading price of Repap common shares on 
The Toronto Stock Exchange. The transaction values Repap,s equity at 
approximately CAD 160 million (EUR 120 million), implying a total enterprise 
value for Repap of approximately CAD 1.35  billion (EUR 1.01 billion). The 
transaction will result in a  goodwill value of approximately CAD 400 million 
(EUR 300 million).  With respect to Iceberg's outstanding debt securities, 
UPM-Kymmene is considering its options, which may include purchases of such 
securities in negotiated transactions, a redemption of all or a portion of 
such securities after consummation of the transaction and/or leaving such 
securities outstanding.

The transaction has been unanimously approved by the boards of directors of 
both UPM-Kymmene and Repap. In addition, Repap,s two largest shareholders, 
the Third Avenue Trust and TD Asset Management Inc., have agreed to support 
the transaction and vote their combined total of approximately 31% of Repap,s 
common shares in favour of approving the transaction, subject to certain 
conditions as outlined in their respective support agreements.

The transaction requires the approval of 66 2/3% of the votes cast by Repap 
shareholders. A shareholders, meeting to approve the amalgamation is expected 
to be held in mid-October. The transaction is conditional upon receipt of all 
necessary regulatory approvals. The transaction does not require the approval 
of UPM-Kymmene shareholders.

The acquisition supports UPM-Kymmene,s long-term strategy. The transaction 
strengthens UPM-Kymmene,s global leadership in magazine papers and it is a 
logical step for UPM-
Kymmene to become a major local magazine paper producer in North America. 
UPM-Kymmene continues to further develop a low cost production structure with 
state-of-the-art facilities. In addition, substantial synergies can be 
achieved. UPM-Kymmene estimates that approximately CAD 50 million (EUR 37 
million) in annual pre-tax synergies can be achieved by 2002 through product 
and market mix optimization, cost savings in purchasing, logistics and 
selling, general and administrative expenses as well as via improvement 
through best practices.

Juha Niemel,, the President and Chief Executive Officer of UPM-Kymmene said 
&that Repap,s management and personnel have done an outstanding job over the 
past years to improve the financial and operational performance of the 
company. The fully integrated mill will enable UPM-Kymmene to better serve 
its North American customers8.

Stephen Larson, the President and Chief Executive Officer of Repap, stated 
that &Repap,s world class operations and people will complement UPM-Kymmene,s 
core competence of efficiency very well8.

Repap has agreed not to solicit competing offers or proposals to the 
transaction, although it may respond to an unsolicited superior proposal. As 
a condition of UPM-Kymmene entering into the transaction, Repap has granted 
UPM-Kymmene an irrevocable option to purchase newly issued common shares of 
Repap representing approximately 19.9% of the issued and outstanding common 
shares of Repap. This option may be exercised by UPM-Kymmene if a competing 
acquisition proposal is publicly announced. In certain circumstances, Repap 
will be required to pay a termination fee to UPM-Kymmene. The option and the 
termination fee have an aggregate economic value of CAD 18 million (EUR 13.6 
million), representing approximately 1.3% of Repap,s enterprise value.

RBC Dominion Securities Inc. acted as financial advisor to UPM-Kymmene and 
Donaldson, Lufkin & Jenrette acted as financial advisor to Repap.

About UPM-Kymmene

UPM-Kymmene, which is based in Helsinki, Finland, is one of the world,s 
largest forest product companies and paper producers. The Group,s turnover in 
1999 amounted to EUR 8.3 billion (CAD 11.1 billion) and operating profit to 
EUR 1.6 billion (CAD 2.1 billion). The company,s product range covers 
printing papers, converting materials and wood products. Printing Papers, 
which comprise magazine papers, newsprint and fine papers, account for over 
half of the Group,s  turnover. UPM-Kymmene is the world,s second largest 
producer of magazine papers and is among the top ten producers of newsprint 
and fine papers. UPM Converting is among Europe,s leading suppliers of 
converting materials. The Group is also Europe,s biggest plywood producer and 
one of the continent,s biggest producers of sawn timber. UPM-Kymmene,s 
operations are focused on European Union countries and the United States, 
where the company owns Blandin Paper in Minnesota producing LWC magazine 
papers. North American sales account for 11% of the Group,s turnover. The 
Group has production plants in 15 countries and 170 sales and distribution 
companies spanning five continents.

About Repap

Repap is a major producer of coated groundwood paper (LWC) with a 9% share of 
the total North American capacity. In 1999, the company,s net sales  amounted 
to CAD 570 million (EUR 425 million) and operating profit to CAD 68 million 
(EUR 51 million). The company,s high quality paper is utilized in magazines, 
catalogs, inserts and commercial printing applications. Repap's world-class 
coated paper complex in New Brunswick, Canada, has two modern paper machines 
with a design capacity of 450,000 metric tons, a northern bleached softwood 
kraft pulp mill with an annual capacity of 235,000 metric tons and an 
integrated groundwood pulp mill with an annual capacity of 125,000 metric 
tons. Repap also has two sawmills with an annual capacity of 137,000 cubic 
metres. Repap employed 1,480 persons at the end of 1999.
This press release contains certain statements that are neither reported 
financial results nor other historical information. These statements are 
forward-looking statements within the meaning of the safe-harbor provisions 
of the U.S. federal securities law. These forward- looking statements are 
subject to risks and uncertainties that could cause actual results to differ 
materially from those expressed in the forward-looking statements. Many of 
these risks and uncertainties relate to factors that are beyond the 
companies, ability to control or estimate precisely, such as future market 
conditions, the behavior of other market participants and the actions of 
governmental regulators. These and other risk factors are detailed in the two 
companies, SEC reports. Readers are cautioned not to place undue reliance on 
these forward- looking statements, which speak only as of the date of this 
press release. The companies do not undertake any obligation to publicly 
release any revisions to these forward-looking statements to reflect events 
or circumstances after the date of this press release.

-30-

For further information, please contact:

UPM-Kymmene Corporation:
Martin Granholm, Executive Vice President, tel. +358 204 15 0004
Olavi Kauppila, Vice President, Investor Relations, tel. +358 204 15 0658

Repap Enterprises Inc.:
Stephen Larson, President & Chief Executive Officer, tel. 1 (203) 964-6163
Michelle Cormier, Vice President & Chief Financial Officer, tel. 1 (203) 
964-6168