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July 18, 2011 1:10 PM

Temple-Inland Board Spurns International Paper Offer Again

Posted by Tom Huddleston Jr.

Shipping materials company Temple-Inland announced on Sunday that its board of directors has voted unanimously to reject an unsolicited $3.3 billion takeover offer from International Paper Company, the country's largest containerboard producer.

The Austin, Tx.-based company said that its board has also recommended that Temple-Inland shareholders not tender their shares in support of the International Paper offer. As The Am Law Daily reported last week, International Paper took its hostile $3.3 billion bid directly to those shareholders on July 12 after the Temple-Inland board first rejected that offer in early June.

While International Paper's offer to Temple-Inland shareholders expires Aug. 9, Bloomberg reports that Temple-Inland has also adopted a poison pill takeover defense that would prevent any buyer from acquiring more than 10 percent of the company's stock.

Debevoise & Plimpton corporate partner Jeffrey Rosen is serving as lead counsel to International Paper on the proposed takeover, according to our prior reporting. A Wachtell, Lipton, Rosen & Katz team led by corporate partners Daniel Neff and Benjamin Roth is representing Temple-Inland in the matter. Gibson, Dunn & Crutcher corporate partner Eduardo Gallardo has been hired to represent UBS AG and Evercore Partners, the lenders backing International Paper's offer.

As The Am Law Daily noted last week, Memphis-based International Paper's latest offer to Temple-Inland shareholders is the same as the one it proposed to the company's board on June 7. The $3.3 billion sum translates to $30.60 per Temple-Inland share--a 46 percent premium over Temple-Inland's June 6 closing price.

The Temple-Inland board said in its Sunday announcement that the hostile bid "grossly undervalues" the company and suggested that there is no guarantee that any deal would hold up under regulatory scrutiny.

Should International Paper prevail, the company's share of the North American corrugated-packaging market would jump from 27 percent to about 37 percent, according to Bloomberg.

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