) took a step forward toward splitting off its homebuilding and
real estate company, WRECO to
TRI Pointe Homes, Inc.
) by announcing the final exchange ratio related to the
As disclosed, Weyerhaeuser's shareholders will have an option to
convert each of their holdings into 1.7003 common shares of WRECO,
which, in turn, can be converted into 1.297 shares of TRI Pointe
Effectively, each share of Weyerhaeuser will be exchanged for
2.2053 common shares of Tri Pointe (i.e., shareholders with $1.00
worth of Weyerhaeuser's shares will receive $1.05 worth of Tri
Pointe's shares). Weyerhaeuser anticipates accepting nearly 58.8
million common shares for the exchange offer.
The exchange offer will presently consummate on Jul 2 as against
Jun 30 aimed earlier. Upon completion of the offer, WRECO will be
merged with a subsidiary of TRI Pointe Homes, becoming a wholly
owned subsidiary of the latter.
Following the completion, the split-off transaction will result in
lower outstanding shares for Weyerhaeuser, while 79.6% of Tri
Pointe's shares will represent those that were issued in connection
with the deal.
Market sentiments were in favor of Weyerhaeuser as the company
touched a new 52-week high of $33.26 during its trading session
yesterday. With a trading volume of nearly 21.3 million shares, the
company closed at $33.09, reflecting a year-to-date return of 6.4%.
We believe the aforementioned transaction will bode well for
Weyerhaeuser's growth prospects, as freed up resources can be
utilized for its core forest products business. Also, the
transaction will be tax-free for shareholders participating in the
Weyerhaeuser currently has a $19.4 billion market capitalization
and carries a Zacks Rank #3 (Hold). Some better-ranked stocks in
the building products industry include
United Rentals, Inc.
), each holding a Zacks Rank #2 (Buy).
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WEYERHAEUSER CO (WY): Free Stock Analysis
UTD RENTALS INC (URI): Free Stock Analysis
TRI POINTE HOME (TPH): Free Stock Analysis
NORTEK INC (NTK): Get Free Report
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