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Mercer International Inc. Message Board

  • kunt_de_lorean kunt_de_lorean Jun 6, 2011 4:54 PM Flag

    What a joke! [Temple-Inland $30 share buyout]

    MERC and TIN have same listed book value: $8.75

    MERC has 57 mil. shares out TIN has 105 mil.

    I say it's a crying shame that TIN is offered $30 a share in a buyout, and refuses, while today buyers refused to pay $15, or $13, or even $12 for MERC.

    Are we all crazy?

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    • MERC is a very cheap company, but its small size and wide geographical dispersion make a takeover very unlikely. It's very hard to imagine that all three plants would fit into an acquirer's plans. It's equally hard to imagine that MERC management would be willing to sell only the German or only the Canadian assets and go forward with the remainder as an even smaller company.

      Keep in mind that Temple Inland's plants are concentrated in the U.S. and Mexico, within a few hours of any IP executive or senior engineer, with no jet lag.

      I like MERC the way it is and believe in the company's future. As debt gets paid down, look for acquisitions, not a takeover.

      • 2 Replies to tiger199519
      • peter_norths_proctologist peter_norths_proctologist Jun 6, 2011 10:02 PM Flag

        "...As debt gets paid down, look for acquisitions, not a takeover."

        A key observation, and part of the reason I'm here: Even if NBSK prices moderate over the next few years, this stock should perform well due to the gradual improvement in the balance sheet alone. In fact, that could be the greatest catalyst we have in an uncertain world. And it goes unappreciated - for now. But will be reflected in future stock price as long as they stick to plan. This is one catalyst that requires patience.

      • Well, I've read all the messages and the points are well taken. Thanks kunt for bringing this up.

        I am not sure every knows TIN was approached, although every one at TIN does. It was up $9 after hours - almost the price MERC is selling for today.

    • Interesting.

      TIN was bought for 0.9x annual sales. And their net debt is similar to MERC.

      The same p/s metric would assign MERC a market cap over $1.2 billion (USD). Or $21/share, using 57 million fully diluted count.

    • I bought some MERC today..

    • kunt I agree with you 100%. Someone should show your message to the BOD of IP.

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