Int’l Paper goes hostile in bid for corrugated producer

United States – America’s largest paper manufacturer International Paper is persisting with its US$ 3.3 billion offer for corrugated packaging producer Temple-Inland even though the latter’s board has unanimously rejected the bid, saying it ‘grossly undervalues’ the company. International Paper has said that it will take its offer directly to Temple-Inland’s shareholders.

‘We are very disappointed with the response of Temple-Inland’s board of directors,’ International Paper’s Chairman and Chief Executive John Faraci has confirmed in a statement. ‘We believe that our proposal offers clearly superior and compelling value to Temple-Inland’s shareholders. Our proposal reflects the future business plans and economic outlook for Temple-Inland and for the sector, and incorporates a significant portion of the cost savings resulting from the merger of International Paper and Temple-Inland.’

International Paper first approached Temple-Inland on May 17 about a takeover, according to Mr Faraci.

Temple-Inland Inc. manufactures corrugated packaging and building products, which the company treats as two separate operating segments. The packaging operation, which includes seven mills and 59 converting facilities, manufactures containerboard (linerboard, corrugating medium and white-top linerboard) and converts it into a range of corrugated packaging materials. The output of the company’s building products segment includes lumber, gypsum wallboard, particleboard, MDF and fibreboard. It also manufactures lightweight gypsum facing paper at its mill in Newport, Indiana.