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Tuesday, June 7, 2011

Temple-Inland adopts poison pill to fend off IP, (NYSE: TIN), (NYSE: IP)

Temple-Inland Inc (TIN.N) adopted a "poison pill" stockholder rights plan on Tuesday to fend off a hostile takeover, a day after rival International Paper Co (IP.N) launched an unsolicited $3.3 billion bid for the packaging company. Temple-Inland said it adopted the stockholder rights plan and plans to distribute one preferred share purchase right for each of its outstanding shares. If a person or group acquired 10 percent or more of Temple-Inland's outstanding shares, these options would allow the holders to purchase more shares -- diluting the holdings of anyone who would try to acquire the company. Temple-Inland rejected the $30.60 per share cash bid, a 46 percent premium to its stock's closing price on Monday, saying it "grossly undervalues" its assets and raising antitrust concerns around a deal that would give the combined company 40 percent market share.

Temple-Inland Inc. manufactures corrugated packaging and building products, which the Company considers as two separate operating segments. Shares of TIN jumped a spectacular 41.36% or $8.69/share to $29.70. In the past year, the shares have traded as low as $15.48 and as high as $26.21. On average, 1272620 shares of TIN exchange hands on a given day and today's volume is recorded at 3731400.

International Paper Company (International Paper) is a global paper and packaging company, with markets and manufacturing operations in North America, Europe, Latin America, Russia, Asia and North Africa. Shares of IP remained unchanged at $29.65. In the past year, the shares have traded as low as $19.33 and as high as $33.01. On average, 5443850 shares of IP exchange hands on a given day and today's volume is recorded at 1310478.



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