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Nov. 17, 2015, 6:49 PM
- Plum Creek Timber (NYSE:PCL) shareholders are set to enjoy a dividend hike of up to 13% upon its merger with Weyerhaeuser (NYSE:WY), part of the motive behind RBC analyst Paul Quinn's upgrade of PCL shares to Outperform from Sector Perform with a $56 stock price target, raised from $42.
- The combined company will continue to pay WY’s $1.24/share annual dividend, while PCL shareholders receive $1.76/share; given that PCL shareholders will receive 1.6 WY shares per PCL share, the equivalent dividend payments will rise to $1.98, a 13% improvement, Quinn explains.
- Quinn believes the combo's synergies, increased liquidity and broadened timberlands diversity should make WY-PCL the investment choice for any investor looking for exposure to timber markets.
Nov. 9, 2015, 9:06 AM
- The two companies are currently holding a joint conference call to discuss the deal with investors and analysts.
- Webcast and presentation slides
- WY -5.35% to $28.84 and PCL +13.6% to $45.75 premarket.
- The deal is expected to close late in Q1 or early in Q2, and the merged company's 13-member board will have eight from WY and five from PCL. The $1.24 per share annual dividend is maintained for WY holders, but represents a 13% increase for PCL owners. FAD per share accretion is expected in year one.
- The merger is not contingent on WY's ongoing strategic alternatives review of its cellulose fibers business. Options are still business as usual, or a sale/spin of the unit.
- Previously: Weyerhaeuser acquiring Plum Creek to make $23B timber giant (Nov. 8)
Nov. 8, 2015, 4:10 PM
- Weyerhaeuser (NYSE:WY) will acquire Plum Creek (NYSE:PCL) in a merger that will create a Northwest U.S. timber giant.
- Plum Creek has a $7B market cap. The result will be a $23B timber REIT carrying more than 13M acres of land. Both boards have unanimously approved the deal.
- It's an all-stock transaction; for every Plum Creek share, holders will receive 1.6 shares of Weyerhaeuser. After the deal, the combined company will execute a $2.5B share repurchase which will effectively make the deal look like a 70% stock/30% cash deal.
- With Weyerhaeuser the surviving company, its Doyle Simons will be president and CEO, while Plum Creek's Rick Holley will become non-executive chairman.
- The two companies had a combined 2014 EBITDA of $2.2B. They say that annual cost synergies will come to $100M. Keeping Weyerhaeuser's current annual dividend of $1.24/share will represent a 13% increase to the dividend currently received by Plum Creek shareholders.
Oct. 28, 2013, 5:44 PM
- Plum Creek Timber (PCL) will acquire 501K acres of timberlands in Alabama, Georgia, South Carolina, Virgina, and West Virginia for $869M and rural and development-quality lands near Charleston, South Carolina, for $152M from MeadWeastvaco (MWV). The deal also includes $65M for subsurface rights and wind-power assets on the timberlands.
- In conjunction, the 2 companies formed a joint venture to develop the South Carolina lands.
- The majority of the proceeds will be distributed to MeadWestvaco shareholders.
- Plum Creek announced it intends to finance the acquisition by offering 14.1M shares (2.115M overallotment) in a follow-on. The sale would be good for proceeds of $700M at today's close.
- MeadWestvaco PR, Plum Creek Timber PR
Plum Creek Timber Co Inc is a real estate investment trust. It owns and manages timberlands in the United States. Its products include lumber products, plywood, medium density fiberboard, and related by-products, such as wood chips.
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