(Corrects sequence of events in fourth paragraph of story published July 25.)
Temple-Inland directors’ “utter refusal” to hold talks is unreasonable and not in the best interests of the company or its shareholders, investor Alan R. Kahn said in a complaint filed today in Delaware Chancery Court in Wilmington. Kahn seeks to represent all Temple-Inland shareholders in his request for a court order directing the company to consider and respond in good faith to acquisition offers.
“The director defendants’ selfish refusal to negotiate deprives Temple-Inland’s stockholders of the certainty of receiving a significant immediate cash premium versus waiting years for a recovery in building products,” lawyers for Kahn said in the complaint. “Their rejection also ignores that the economic recovery is slow, which implies a slow recovery in packaging markets.”
International Paper, the world’s largest pulp and paper maker, took its buyout offer directly to shareholders on July 12. Temple-Inland said six days later the $30.60-a-share cash bid “grossly undervalues” the Austin, Texas-based company.
Tom Ryan, a spokesman for Memphis, Tennessee-based International Paper, said in an e-mail on July 18 that Temple’s board had “unrealistic” price expectations.
Kahn argued in his complaint that it would be in the best interest of Temple-Inland shareholders for the company to take advantage of the proposed transaction or at least negotiate actively with International Paper.
“The director defendants’ stubborn refusal jeopardizes any chance that Temple-Inland shareholders will have the opportunity to consider a higher per share price offer by International Paper,” Kahn said in the complaint.
Chris Mathis, a spokesman for Temple-Inland, didn’t immediately return a phone call seeking comment on the complaint.
The case is Kahn v. Temple-Inland, CA6702, Delaware Chancery Court (Wilmington).
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