International Paper recently announced that it has proposed to acquire all of the outstanding shares of Temple-Inland (NYSE: TIN) for $30.60 per share in cash. Under the terms of the proposal, the offer represents a 44% premium to Temple-Inland's price as of noon EDT, June 6th, 2011($21.21). International Paper's offer, which is backed by committed financing from UBS Investment Bank, is contingent on appropriate documentation and regulatory approval, which International Paper believes can be obtained.
International Paper first communicated its proposal verbally to the chairman of Temple-Inland on May 17th, 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 today sent a letter to Temple-Inland expressing its continued interest in pursuing an acquisition (the full text of that letter is below).
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."
The offer reflects the potential cyclical improvement in Temple-Inland's building products segment and International Paper's willingness to share a portion of the significant synergies available from the transaction with Temple-Inland shareholders. International Paper is prepared to consider all alternatives to successfully complete this transaction.
