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Rock-Tenn, MeadWestvaco Studying MLP Structure for Mills

Rock-Tenn Co. (RKT) and MeadWestvaco Corp. (MWV) said they’re among paper and packaging companies studying the possibility of creating master-limited partnerships for their mills.

Adoption of the MLP structure may be “potentially attractive,” Steve Voorhees, chief executive officer of Norcross, Georgia-based Rock-Tenn, said today on a conference call. MeadWestvaco is “actively evaluating to understand the mechanics” of a potential MLP transaction, Chairman John Luke said today on a separate call.

Shares of Memphis-based International Paper and other U.S. containerboard makers soared July 24 after Bloomberg News reported that New York-based Perry Capital LLC took stakes in International Paper, Rock-Tenn and Kapstone Paper & Packaging Corp. Those companies can create MLPs for their mills and boost earnings, according to a letter sent to the hedge-fund firm’s investors.

International Paper (IP) is also investigating the creation of an MLP, its CEO John Faraci said yesterday in an interview.

MLPs, commonly used in the oil and natural gas industry, pay no federal income tax as long as they distribute most of their cash to shareholders. The partnerships have surged in popularity as an energy boom spawned investment opportunities in oil-and-gas exploration, production and pipelines.

Rock-Tenn rose 1.4 percent to $101.95 in New York while Richmond, Virginia-based MeadWestvaco climbed 0.8 percent to $43.15. International Paper fell 1.3 percent to $48.22.

To contact the reporter on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net

To contact the editors responsible for this story: Simon Casey at scasey4@bloomberg.net Jim Efstathiou Jr., Tina Davis

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