International Paper steps up hostile $3.3-bn bid for Temple-Inland
12 Jul 2011
Corrugated packaging company International Paper Co (IP) yesterday took its unsolicited $3.3-billion takeover bid directly to shareholders of Temple-Inland Inc, after its smaller rival had last month rejected the bid as too low.
Stepping up its hostile bid for the corrugated packaging maker after the board of Temple-Inland adopted the poison pill strategy last month aimed at limiting IP buying large stakes from the market.
''Temple-Inland's price expectations are unrealistic and their unwillingness to engage in any meaningful discussions with respect to value has left us with no alternative but to make our offer directly to Temple-Inland shareholders,'' IP CEO John Faraci said in a statement.
Memphis, Tennessee-based IP, the world's largest producer of paper and packaging products had in early June made a $30.60 per share in cash or $3.3 billion hostile bid to buy Temple-Inland.
The offer represented a 44-per cent premium to Temple-Inland's stock price of $21.21 on 6 June 2011.
The board of Temple-Inland had rejected the offer and said that IP's bid undervalues the company and the opportunistic hostile bid was being made because Temple-Inland's building materials business had weakened in the economic downturn.