NEWS RELEASE

Tolko Industries announces offer for Riverside Forest Products

Vernon, B.C. - Tolko Industries Ltd. (“Tolko”), a privately owned B.C. based forest products company, announced today its intention to make an offer to purchase all the outstanding shares of Riverside Forest Products Limited (“Riverside”) (TSX:RFP) for C$29.00 per share in cash. Tolko is the 2nd largest shareholder of Riverside, holding 1.758 million or 18.6% of the approximately 9.4 million Riverside shares outstanding. The total value of the transaction is estimated at C$340 million based on the net debt outstanding of Riverside as of June 30, 2004.

On August 12, 2004, Mr. J. Allan Thorlakson, Tolko’s President and Chief Executive Officer, met with Mr. Gordon Steele, Chairman, President and Chief Executive Officer of Riverside, to propose a negotiated transaction that would benefit shareholders of both companies. After engaging in a number of discussions since August 12, Tolko has concluded there is no basis on which to continue such negotiations and is, therefore, announcing its intention to make this offer to shareholders.

This offer represents a premium of 38% over the weighted average trading price of Riverside’s shares on the Toronto Stock Exchange for the 20 trading days ending August 12, 2004, the date on which Mr. Thorlakson and Mr. Steele first met to discuss Tolko’s proposal.

“We are making this offer because we are convinced that our people and physical assets, when combined with Riverside’s people and physical assets, will yield a stronger, more competitive world-class forest products company with greater growth prospects than each of the companies could achieve alone,” said Mr. Thorlakson.

"Our all cash offer represents a significant premium of 38% and provides Riverside’s shareholders with an immediate value maximization opportunity in a stock that has been characterized by low trading volumes.”

"Although Tolko was founded in BC 50 years ago and remains a BC-based business, we have made substantial investments in other Western provinces over the last number of years. However, today’s business climate in BC has encouraged us to refocus our priorities in this province.”

Full details of the offer will be included in the formal take-over bid and related documents, which are expected to be filed with securities regulators on August 31, 2004 and which will be mailed to Riverside shareholders as soon as Riverside provides Tolko with a list of its shareholders. It is anticipated that the offer will be open for acceptance until 9:00 pm (Vancouver time) on October 6, 2004, unless it is withdrawn.

Completion of the offer will be subject to sufficient shares being tendered to the offer so that, combined with the 18.6% Tolko already owns, Tolko would own at least 75% of Riverside’s common shares, on a fully diluted basis. If that condition is met, and Tolko acquires common shares tendered to the offer, Tolko intends to acquire the remaining shares in accordance with applicable laws. The offer will also be subject to other usual conditions, including receipt of all necessary regulatory approvals, no material adverse change of Riverside and waiver of Riverside’s shareholder rights plan.

Tolko’s obligation to purchase Riverside’s common shares is not conditional upon any financing arrangement as Tolko has accepted a fully underwritten commitment from a Canadian chartered bank to provide financing for the transaction. Tolko has retained RBC Capital Markets to act as its financial advisor and to act as dealer manager under the offer.

About Tolko Industries Ltd.

Founded in 1961, Tolko is a privately-owned forest products company employing over 2,400 people. Tolko has ten manufacturing divisions in British Columbia, Alberta, Saskatchewan and Manitoba, and produces dimension lumber, specialty kraft paper, plywood, oriented strand board, wood chips and engineered wood products which are sold to world markets. Tolko has held its position in Riverside since 2000.

Tolko is amalgamated under the Canada Business Corporations Act. Its head office is located at 3203-30th Avenue, Vernon, British Columbia, (PO Box 39) V1T 2C6. Tolko’s telephone number is 250-545-4411 and website is www.tolko.com.

For more information:

Tolko Industries Ltd.
Trevor Jahnig
Chief Financial Officer

Phone: (250) 545-4411
Fax: (250) 545-4783
E-mail

Back to News Releases