Temple-Inland Inc. (NYSE: TIN) shares climbed 41.6% to $29.75 Tuesday, a day after International Paper Co. (NYSE: IP) made a $3.31-billion hostile bid for the maker of corrugated packaging and building products. Volume for Temple-Inland surpassed 10.8 million shares, trouncing an all-day average of 1.2 million.
The bid amounts to $30.60 per share. Monday, Temple-Inland’s Board of Directors, after careful consideration with its independent financial and legal advisors, voted unanimously to reject International Paper’s proposal after the Board determined unanimously that the proposal grossly undervalues Temple-Inland and is not in the best interest of Temple-Inland’s stockholders.
The Board authorized Temple-Inland CEO Doyle R. Simons, to communicate its rejection to John Faraci, International Paper’s Chairman and CEO. Simons stated, “Since we launched the ‘new’ Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers (including IP), building products peers, and the S&P 500. Since that time, our total return to stockholders of 22% greatly exceeds the 5% total return that IP has achieved.
“Through our proven ability to execute our strategy focused on maximizing return on investment (ROI) and profitably growing our business, the Board believes the Company will continue to provide superior results for our stockholders,” continued Mr. Simons. “As the economic recovery continues and the benefits from our strategy continue to be realized, it is the stockholders of Temple-Inland who should gain from those anticipated benefits, not the stockholders of IP.”
The Austin-based Temple-Inland Inc. is a manufacturing company focused on corrugated packaging and building products. The fully integrated corrugated packaging operation consists of seven mills and 59 converting facilities.