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Tuesday, June 7, 2011

Unusual Temple-Inland options bet seen before takeover bid, (NYSE: TIN), (NYSE: IP)

A large bet in Temple-Inland Inc (TIN.N) call options almost two weeks before a rival made an unsolicited bid for the packaging company raised eyebrows on Tuesday. International Paper Co (IP.N) late on Monday offered $3.3 billion for Temple-Inland. In the options market, one select upside call trade expiring in January 2012 stood out. The trade took place on May 25 and positions for a "huge rally in Temple-Inland shares," said Interactive Brokers Group option analyst Caitlin Duffy. The bullish investor paid a net premium of $1.10 per contract for a 6,425-lot January 2012 $25/$30 TIN call spread when Temple-Inland shares were trading at $22.81, Duffy said.

Temple-Inland Inc. manufactures corrugated packaging and building products, which the Company considers as two separate operating segments. Shares of TIN traded higher by 40.36% or $8.48/share to $29.49. 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 26005726.

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 traded higher by 0.44% or $0.13/share to $29.78. 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 18394456.



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