Paper products giant International Paper Company ( IP ) late Monday saw its unsolicited $3.3 billion bid for rival Temple-Inland ( TIN ) rejected, with TIN saying the offer undervalues its business.
Temple-Inland also noted the potential deal could face heavy regulatory scrutiny under antitrust laws.
IP has offered $30.60 per share, or about $3.3 billion for TIN, which represents a healthy 45% premium over the stock's Monday closing price of $21.01.
Temple-Inland CEO Doyle Simons commented, "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."
In contrast, IP CEO John Faraci said that "We believe that our proposal offers clearly superior and compelling value to Temple-Inland's shareholders."
International Paper shares rose $1.59, or +5.4%, in premarket trading Tuesday.
The Bottom Line
We have been recommending shares of International Paper ( IP ) since Apr.5, 2011, when the stock was trading at $30.07. The company has a 3.54% dividend yield, based on last night's closing stock price of $29.65.
International Paper Company ( IP ) is a "Recommended" dividend stock, holding a Dividend.com DARS™ Rating of 3.6 out of 5 stars.
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