Stephen Simpson, CFA
Stephen Simpson, CFA
Wed, Aug. 10, 6:27 PM
- International Paper (NYSE:IP) popped higher during today's trade on rumors it could be a possible takeover target, with BMO Capital analysts highlighting privately-held Koch Industries as a potential buyer since it has been "actively consolidating the forest products sector for more than a decade."
- BMO also speculates on an IP pairing with Georgia-Pacific, saying the combination would pose regulatory challenges and likely require divestitures, particularly in the container board and fluff pulp sectors.
- IP-GP would sport a combined pro forma market share of ~45% in container board and 65%-70% in fluff pulp, including IP’s pending acquisition of Weyerhaeuser’s (NYSE:WY) fluff pulp assets.
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.
Nov. 4, 2013, 6:13 AM
Nov. 4, 2013, 2:06 AM
- Tri Pointe Homes (TPH) is reportedly closing in on a $2.7B deal to merge with Weyerhaeuser's (WY) homebuilding division using a tax-efficient structure called a Reverse Morris Trust.
- Weyerhaeuser will spin off the unit so that it can combine with Tri Pointe Homes, which will retain management control. Weyerhaeuser's shareholders are set to own 80.5% of the new entity and Tri Pointe's shareholders the rest.
Oct. 21, 2013, 4:38 PM
- Tri Pointe Homes (TPH) spiked before the close to a 6% gain on a Reuters report that the company is in advanced talks to buy Weyerhauser's (WY) homebuilding unit for ~$2.7B.
- WY, which said in June it was reviewing strategic options for the homebuilding and real estate development unit, is said to be trying to finalize a sale to TPH as soon as in the next two weeks.
- Taylor Morrison Home (TMHC) and Brookfield Residential Properties (BAM) are among the companies that also have been in talks with Weyerhaeuser about buying the division, according to the report.
Sep. 20, 2013, 5:34 PM
- Weyerhaeuser's (WY) homebuilding division is attracting interest from Brookfield Residential Properties (BRP), the land developer and home builder controlled by Brookfield Asset Management (BAM), WSJ reports.
- Weyerhaeuser Real Estate Co. executives reportedly have met with bidders to answer questions about its operations; while some bidders are interested in only a portion of the unit, BRP is said to be interested in buying the entire group.
- BAM's size - $180B in assets - might prove an advantage vs. other interested parties since WY wants to sell the homebuilding division in a reverse Morris trust, a tax-free method of spinning off a division to be merged with an acquirer.
Aug. 14, 2013, 3:26 AM
- Weyerhaeuser (WY) has reportedly received preliminary expressions of interest for its home-building unit from unnamed suitors. The timber conglomerate said in June that it was evaluating the options for the business, which is valued at over $3B.
- Most of the biggest house builders in the country are expected to look at buying the operations, attracted by the thousands of lots it owns that are ready or close to ready for construction, especially in California.
- "It's going to move the needle for most builders," says Florida-based consultant Michael Kahn.
Jun. 16, 2013, 3:47 PM
It's a busy Sunday for Weyerhaeuser (WY): i) Appoints Doyle Simons, former CEO and chairman of Temple-Inland, to replace retiring CEO Dan Fulton. (PR) ii) Acquires 645K acres of high-quality timberlands in Washington and Oregon from Brookfield Asset Management (BAM) for $2.65B, boosting its holdings in the area by 33%. (PR) iii) Says it will explore "strategic alternatives" for WRECO, its homebuilding and real estate development business, including a merger, sale, or spin-off. (PR)| Jun. 16, 2013, 3:47 PM
Jun. 7, 2011, 2:52 PM
International Paper (IP +1.1%) and Temple-Inland (TIN +42.3%) are in focus after IP's $30.60/share bid was rejected despite being a 46% premium to Monday's closing price. Other packaging and paper stocks rally on calls from bullish analysts that the industry is heading for consolidation: PKG +6.9%, WY +6.2%, BZ +5.6%, KS +4.3%, RKT +3.1%.| Jun. 7, 2011, 2:52 PM