WASHINGTON (dpa-AFX) - Packaging and building products maker Temple-Inland Inc. (TIN), Tuesday said its board has adopted a stockholder rights plan to prevent hostile takeover by International Paper Co. (IP).
Yesterday, International Paper proposed to acquire the entire stake in Temple-Inland for $30.60 per share in cash. Under the terms of the proposal, International Paper's offer represents a 44 percent premium to Temple-Inland's price as of June 6th, 2011.
However, Temple-Inland board has rejected International Paper's proposal, saying that the proposal grossly undervalues the company, and is not in the best interest of its stockholders.
Under the stockholder rights plan, which is also called as 'poision pill', the rights will be exercisable only if a person or group acquires 10% or more of Temple-Inland's common stock.
Each right will entitle stockholders to buy one one-hundredth of a share of a new series of junior participating preferred stock at an exercise price of $120.
If a person or group acquires 10% or more of Temple-Inland's outstanding common stock, each right will entitle its holder to purchase a number of Temple-Inland's common shares having a market value of twice such price.
Further, Temple-Inland's board has declared a dividend distribution of one preferred share purchase right on each outstanding share of Temple-Inland common stock.
The distribution will be made on June 17, 2011, payable to stockholders of record as of the close of business on that date, and is not taxable to stockholders. The rights will expire on June 7, 2016.
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© 2011 AFX News
