PaperlinX has received an incomplete, indicative, conditional and non-binding proposal  from an unnamed private equity firm to acquire all of the issued capital of PaperlinX and the Step-up Preference Securities (SPS).

In a letter to the ASX, the Company explained it has also received a number of separate proposals to acquire parts of its business, which are currently being assessed.

The whole of Company proposal currently suggests a cash price for PaperlinX ordinary shares of approximately $0.09 per share and $21.85 for each SPS, bring the total value of the company to around $500m.

The statement to the ASX outlined that there is no certainty that the Company will receive a complete proposal at the suggested price or at all, or that any transaction would eventuate.

“The Board of PaperlinX has not yet formed a view with respect to any of the proposals, and the Company will provide an update in due course.

“Meanwhile, the Board makes no recommendation to PaperlinX shareholders other than they do not need to do anything in relation to the whole of Company proposal.”

Since the Company’s AGM, PaperlinX says trading and general economic conditions have continued to deteriorate, particularly in its key European markets.

Following further disappointing trading volumes, PaperlinX now expects to report a statutory loss after tax for the first half of the 2012 financial year of approximately $26M at current exchange rates.

The paper giant adds it is continuing its business restructuring program to remove costs, but benefits flowing through are not sufficient to offset the weakened market conditions.

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