| Cellu Tissue (NYSE:CLU), a North American producer | | | | The merger is subject to certain customary |
| of tissue products, today announced that it has | | | | conditions, including the receipt of regulatory |
| entered into a definitive merger agreement with | | | | approvals and is expected to be completed in the |
| Clearwater Paper Corporation ("Clearwater") pursuant | | | | fourth quarter of calendar 2010. |
| to which Clearwater would acquire all of the | | | | Weston Presidio V, L.P., which acquired the Company |
| outstanding common stock of the Company in an | | | | in 2006, is the Company's largest shareholder and is |
| all-cash transaction which values the Company at | | | | also represented on the Company's Board of |
| approximately $502 million, including approximately | | | | Directors. It and Russell C. Taylor, the Company's |
| $255 million of debt. Under the terms of the | | | | President and Chief Executive Officer, have agreed |
| agreement, the Company's stockholders will receive | | | | to vote shares owned by them representing, in the |
| $12.00 per share in cash for each share of common | | | | aggregate, approximately 56% of the Company's |
| stock they own, representing a premium, based on | | | | outstanding shares, in favor of the transaction. |
| the closing price on September 15, 2010, of | | | | In connection with the transaction, the Company or |
| approximately 52.6% over the 30 day average | | | | Clearwater intends to tender for or defease the |
| closing trading price and 48.2% over the 90 day | | | | Company's outstanding 11.5% Senior Notes due |
| average closing trading price. | | | | 2014. Mr. Taylor commented on the transaction |
| The agreement has been unanimously approved by | | | | stating, "The Company's Board of Directors has |
| the Company's Board of Directors. The transaction | | | | concluded a lengthy evaluation of this transaction and |
| was recommended to the Company's Board of | | | | has determined that the transaction will provide |
| Directors by a Transaction Committee established to | | | | meaningful value to, and is in the best interests of, |
| evaluate the transaction. The closing of the merger | | | | our stockholders. |
| is not conditioned on Clearwater obtaining financing. | | | | |