Temple-Inland Rebuffs International Paper’s Acquisition Proposal

“In this regard, the Temple-Inland Board of Directors unanimously determined that International Paper’s proposal announced yesterday to acquire the company grossly undervalues Temple-Inland and its future prospects and is not in the best interests of Temple-Inland stockholders.”

The shareholder rights will be exercisable only if a person or group acquires 10 percent or more of Temple-Inland’s common stock. Each right will entitle stockholders to buy one one-hundredth of a share of a new series of junior participating preferred stock at an exercise price of $120.

If a person or group acquires 10 percent or more of Temple-Inland’s outstanding common stock, each right will entitle its holder (other than such person or members of such group) to purchase, at the Right’s then-current exercise price, a number of Temple-Inland’s common shares having a market value of twice such price. In addition, if Temple-Inland is acquired in a merger or other business combination transaction after a person has acquired 10 percent or more of the company’s outstanding common stock, each Right will entitle its holder to purchase, at the Right’s then-current exercise price, a number of the acquiring company’s common shares having a market value of twice such price. The acquiring person will not be entitled to exercise these Rights.

Tempe-Inland’ initial statement noted that its board authorized Doyle R. Simons, Chairman and CEO of Temple-Inland, to communicate its rejection to John Faraci, International Paper’s Chairman and CEO.

“Since we launched the ‘new’ Tempe-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers (including IP), building products peers, and the S&P 500. Since that time, our total return to stockholders of 22 percent greatly exceeds the 5 percent total return that IP has achieved. Through our proven ability to execute our strategy focused on maximizing return on investment (ROI) and profitably growing our business, the board believes the company will continue to provide superior results for our stockholders,” said Simons. “As the economic recovery continues and the benefits from our strategy continue to be realized, it is the stockholders of Temple-Inland who should gain from those anticipated benefits, not the stockholders of IP.”

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