Packaging and building products company, Temple-Inland Inc yesterday rejected an unsolicited $3.3-billion takeover bid from its larger rival International Paper Co (IP), saying the offer is too low and opportunistic.
Memphis, Tennessee-based IP, the world's largest producer of paper and packaging products yesterday made a $30.60 per share in cash or $3.3 billion hostile bid to buy Temple-Inland.
The offer represents a 44-per cent premium to Temple-Inland's stock price of $21.21 yesterday.
IP chairman and CEO John Faraci said that he had first communicated the offer verbally to the chairman of Temple-Inland Doyle Simons on 17 May and subsequently had face-to-face discussion, but was forced to make a hostile bid after IP received no response from Temple-Inland.
Founded in 1983, Austin, Texas-based Temple-Inland is the third-largest corrugated packaging and building products manufacturing company in the US. Its fully integrated corrugated packaging operation consists of 7 mills and 59 converting facilities.
The building products operation manufactures a diverse line of building products for new home construction, commercial and repair and remodeling markets.
Having a 12-per cent market share of the North American market for corrugated packaging materials, year over year, Temple-Inland has seen their bottom line shrink from $206 million to $168 million last year despite an increase in revenues from $3.6 billion to $3.8 billion.