Temple-Inland Rebuffs International Paper’s Acquisition Proposal
MEMPHIS, TN/AUSTIN, TX—June 7, 2011—International Paper announced on Monday that it has proposed to acquire all of the outstanding shares of corrugated packaging manufacturer Temple-Inland for $30.60 per share in cash.
In response, Temple-Inland first issued a statement that its board of directors, after careful consideration with its independent financial and legal advisors, voted unanimously to reject International Paper’s proposal after the board determined unanimously that the proposal grossly undervalues Temple-Inland and is not in the best interest of Temple-Inland’s stockholders. Today, it announced that its board adopted a stockholder rights plan (known as a poison pill) and declared a dividend distribution of one Preferred Share Purchase Right on each outstanding share of Temple-Inland common stock.
International Paper first communicated its proposal verbally to the chairman of Temple-Inland on May 17, 2011. Subsequently, there has been a call, a face-to-face meeting between the two sides and two letters of correspondence from the chairman of International Paper to the chairman of Temple-Inland. International Paper was informed in a letter from Temple-Inland’s chairman dated June 4, 2011, that the board of Temple-Inland has unanimously rejected International Paper’s proposal. In response, International Paper yesterday sent a letter to Temple-Inland expressing its continued interest in pursuing an acquisition.
International Paper chairman and CEO John Faraci said, “We are very disappointed with the response of Temple-Inland’s Board of Directors. We believe that our proposal offers clearly superior and compelling value to Temple-Inland’s shareholders. Our proposal reflects the future business plans and economic outlook for Temple-Inland and for the sector, and incorporates a significant portion of the cost savings resulting from the merger of International Paper and Temple-Inland, while at the same time creating value for International Paper shareholders.”
In announcing the shareholder rights plan, Doyle R. Simons, chairman and CEO of Temple-Inland, asserted, “The rights are designed to assure that all of Temple-Inland’s stockholders receive fair and equal treatment in the event of any proposed takeover of the company, to guard against abusive tactics to gain control of Temple-Inland without paying all stockholders a premium for that control, and to enable all Temple-Inland stockholders to realize the long-term value of their investment in the company.