IP launches hostile takeover bid for Temple-Inland

After being rebuffed by Temple-Inland’s board of directors, International Paper is making an unsolicited offer to acquire all the outstanding shares of common stock of the wood products company for $30.60, according to documents filed with the Securities ad Exchange Commission (SEC).

On June 6, Temple-Inland announced it had received an unsolicited proposal from International Paper to acquire the company, also for $30.60 per share in cash. Temple-Inland's board of directors voted unanimously to reject that offer, saying it “grossly undervalued” the company and was not in the best interest of Temple-Inland's stockholders.

In its communications with Temple-Inland stockholders, International Paper said it has tried to negotiate with Temple-Inland “multiple times.” International Paper will finance the $3.7 billion deal with $1.5 billion in cash and the rest in borrowings. The merged company would eventually go private, the communication said.

Temple-Inland’s board advised its holders to take no action at this time while it reviews the latest unsolicited offer. But on June 7, after receiving its first formal proposal from International Paper, the company adopted a “poison pill” plan that significantly increases the number of Temple-Inland shares and erects other barriers if an investor acquires 10% or more of the company’s stock. 

Based in Austin, Texas, Temple-Inland produces lumber, gypsum board, fiberboard and other building materials, as well as corrugated packaging.

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