Most of the people I know are taking a cautious, yet wait and see position, as for me I am already looking. I give HQ a total of 3 years left at max, figure it's best to look now because it is going to take some time to find a good job.
As for my package I was playing golf when the day to structure golden parachute contracts happened, so I think I get an escort to the door and a pat on the back
It has been a week since the official announcement...what do the current BCC employees think...and feel? Dis George do you in? What are you being told as to the future? Dis Mr. Stevens come from BCC or MDP? That says alot as to the future plans. He is a "take apart and sell off the assets" professional. Look at his record, and not just at MacBo...
The very best to all of you who have served so faithfully for so many years under the most trying of times, and at times, very inept leadership at the top!
By the way... just what does GH, JH, BG, and the rest, "walk away" with? Does your package come close?
I made my remarks based on actual sales. Again "Moose pasture" in Maine with high developmental potential, mature trees, large waterfront property and not isololated sold for $200/acre. This 770,000 acre purchase was just one of my supporting examples. Of course Mead also paid $700 to BCC for the Rumford mill which was very high. The report you reference may talk about values that high but it's difficult to sell large quantities for those prices. 900,000 acres traded hands in the upper peninsula of Michigan for similar numbers.
Stora sold 300,000 acres in 2002 for $700/acre. PCA 160,000 @ +$400 in 1999. I'm told existing values in Northern states is $1000/acre for moose pasture. Premium woodlands $1500-2000. Many deals include one time cutting rights so don't let $$$ fool you. Hope this helps.
"IP and others are selling land to the same company for similar prices all over the country."
No they aren't. Please go the WY news here on yahoo and see what they sold about 300k acres of land for.
$200 per acre seemed like a very low figure to me, so I did a little searching on google. This took me to the web site for "Hancock Timber Resource Group" (www.htrg.com). Since their business is investing in timberlands, I suppose they ought to have a good feel for the market. Here is what they have to say in their latest, public posting (4th quarter 2003 report):
Properties in the Pacific Northwest had the greatest per-acre market value, with a fourth
quarter average of $1,863. Southern timberland properties averaged $1,079 per acre. Timberland in the Northeast was valued at $1,142 per acre, a value more than double that reported at the conclusion of 2002. This jump in Northeast market value was the result
of a large shift in the intra-regional sample of properties away from the lower value New England states to the much higher value Alleghany region of northern Pennsylvania and southern New York.
Maybe some of the low prices you've seen are the result of companies selling off land that was really marginal from the standpoint of timber production???
If they really are selling good timberland at $200/acre, someone is being dumb and/or someone is getting a real deal...
It's not that I don;t think there are small examples of high prices paid for land. I also think that $200/acre is ridiculously low. But the largest landowners in this country are becoming insurance companies and institutions. They are not paying big money. For example, they just bought all of MeadWestvaco's property (700,000 acres) in Maine for $200/acre. IP and others are selling land to the same company for similar prices all over the country. All I have to say is that watch out what you reward you're CEO's for while they get rich and sell off these assets to improve qtrly results they are killing the long term.
They picked an interesting guy to run the show... there is unrest in the forest, there is trouble with the trees.
When he landed at MB he fired 21 percent of the work force... shored things up, and made it appealing to Weyerhaeuser. There's little doubt that Weyco looked at these operations, but didn't want the headache of getting rid of so many people. MDP will hold this asset for less than five years, shave its workforce to less than 40,000, and will flip it for more than 20 percent when it's all over. Look for UPM or Stora to buy the combined MDP paper operations for a tidy sum.
Nice article but it's really out of date. In these new times it's much harder. MB could lay off half the workers and not improve earnings enough to bring the kind of returns that would make any of the mills attractive. Oh by the way Boise aleady cut a bunch. You still need operators. Look at Boise's last three years of negative earnings. Lost $4,7mm in 2003, $1.7mm in 2002 and over $42mm in 2001. Now that's real performance. Even though Jackson and IFalls are nice assets they just aren't going to be that attractive since there are limited buyers. Most of those buyers are looking for fire sale prices. Since BCC was heavy in debt, it'll be tough to offset a hefty sell price with that kind of depreciation. Good luck.