The takeover battle for Temple-Inland continues to escalate as the Austin, Texas, wood products supplier issued a statement today urging its stockholders to reject an unsolicited offer from International Paper (IP). Temple-Inland’s board of directors voted unanimously to reject the $30.60-per-share offer because it undervalues the company. The timing of the offer is also “extremely opportunistic,” the company said in its official recommendation.
“Housing markets are at historically low levels, temporarily depressing the value of our building products operations,” the board wrote. “IP is attempting to take advantage of our stockholders by moving to grab Temple-Inland at a bargain price at a time when there is little or no market value being ascribed to building products.”
International Paper will finance the $3.7 billion deal with $1.5 billion cash and the rest in borrowings. The company is interested in Temple-Inland’s corrugated packaging operations, which consist of seven mills and 58 converting facilities. Temple-Inland also makes a wide range of wood-based building materials.