NEW YORK, Aug 12 (Reuters) - Canada's Pacifica Papers Inc (Toronto:PPP.TO - news) said on Sunday a court had rejected an appeal by its largest shareholder to block a buyout, allowing rival paper maker Norske Skog Canada (Toronto:NSa.TO - news) to go ahead with its plan to buy out Pacifica. The British Columbia Court's rejection of the appeal by investment group Cerberus Capital Management LP to block the deal came on August 10, Pacifica said in a statement. The rejection confirms an earlier Supreme Court approval of the arrangement. In July, a judge approved Norske Skog Canada's takeover of Pacifica despite objection by Cerebus Management. At that time, a judge rejected claims by the New York investment group's management that Pacifica should have done more to seek alternative offers to the Norske deal, worth C$96O million ($624 million) with assumed debt. Court of Appeal Chief Justice Lance Finch rejected all grounds of appeal and upheld the ruling of the Supreme Court that the arrangement was ``in all respects fair and reasonable''. Pacifica shareholders overwhelmingly approved the takeover deal in June. The merger of the companies would create North America's third-largest newsprint producer. According to Pacifica, Norske Skog Canada had notified the firm that the Canadian Competition Bureau had advised them that the transaction would give Pacifica shareholders a choice of either opting for 2.1 of its shares for each Pacifica share, or C$7.50 in cash plus one Norske share. The price tag includes C$600 million in assumed debt. If the merger is completed on August 27, as planned, the deadline for Pacifica shareholders to choose would be the close of business on August 24, Pacifica said. Norske Canada is 50.8 percent owned by Norwegian forestry giant Norske Skogindustrier A/S, although the Norwegian company's stake will drop to about 35 percent once the Pacifica transaction is completed.