Barclays Maintains an 'Equalweight' on Temple-Inland (TIN); IP's Announcement to Launch a Tender for TIN Likely Prolongs Process
Tweet
Share
E-mailGet Alerts TIN Hot Sheet
Price: $31.99 --0%
Rating Summary:
1 Buy, 5 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
1 Buy, 5 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Join SI Premium – FREE
Barclays maintains an 'Equalweight' on Temple-Inland Inc. (NYSE: TIN), PT lowered from $25 to $24.
Barclays analyst says, "Yesterday, after the market close (7/11/11), International Paper announced plans to launch a tender offer for TIN shares, with plans to also file notification on 7/12/11 with the Federal Trade Commission and the Department of Justice as required by the Hart-Scott-Rodino Act...In this note, we reduce our EPS estimates for TIN to reflect disappointing containerboard box shipments in recent months, coupled with higher wastepaper costs and ongoing weak building product profits. As a result, we are reducing our price target on TIN to $24. However, we maintain our view that unless IP is prepared to carry on a hostile bid for the company for the next two years, IP will eventually need to raise the bid to include 75% to 100% of the capitalized value of synergies."
"As we've noted previously, we believe synergies could approximate $240 MM with a capitalized value of $1.8 BB, or $16 per TIN share. Thus, including 75% to 100% of the $16 per share on top of the base valuation of $24, we believe Int'l Paper (NYSE: IP) would eventually need to pay a price of $36 to $40 per share to effect a transaction with TIN (down from $37 to $41 previously). Although IP's tender will expire August 8, 2011, we would not be surprised to see the tender extended, possibly several times."
For more ratings news on Temple-Inland Inc. click here and for the rating history of Temple-Inland Inc. click here.
Shares of Temple-Inland Inc. closed at $30.55 yesterday.
Barclays analyst says, "Yesterday, after the market close (7/11/11), International Paper announced plans to launch a tender offer for TIN shares, with plans to also file notification on 7/12/11 with the Federal Trade Commission and the Department of Justice as required by the Hart-Scott-Rodino Act...In this note, we reduce our EPS estimates for TIN to reflect disappointing containerboard box shipments in recent months, coupled with higher wastepaper costs and ongoing weak building product profits. As a result, we are reducing our price target on TIN to $24. However, we maintain our view that unless IP is prepared to carry on a hostile bid for the company for the next two years, IP will eventually need to raise the bid to include 75% to 100% of the capitalized value of synergies."
"As we've noted previously, we believe synergies could approximate $240 MM with a capitalized value of $1.8 BB, or $16 per TIN share. Thus, including 75% to 100% of the $16 per share on top of the base valuation of $24, we believe Int'l Paper (NYSE: IP) would eventually need to pay a price of $36 to $40 per share to effect a transaction with TIN (down from $37 to $41 previously). Although IP's tender will expire August 8, 2011, we would not be surprised to see the tender extended, possibly several times."
For more ratings news on Temple-Inland Inc. click here and for the rating history of Temple-Inland Inc. click here.
Shares of Temple-Inland Inc. closed at $30.55 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Viking Holdings (VIK) PT Raised to $82 at Mizuho
- Ferrovial SA (FER:SM) (FRRVF) Reiterated at Buy by UBS on Winning Bid For Tennessee Project
- Cummins (CMI) PT Lowered to $675 at Jefferies
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
BarclaysSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
