Under the terms of the transaction agreement, Weyerhaeuser will distribute ownership of WRECO to Weyerhaeuser shareholders in either a spin-off or split-off transaction, which will be immediately followed by a merger of WRECO with a subsidiary of TRI Pointe, with WRECO surviving the merger and becoming a wholly owned subsidiary of TRI Pointe. If Weyerhaeuser elects a spin-off, all Weyerhaeuser shareholders will participate pro-rata. In a split-off, Weyerhaeuser will conduct an exchange offer pursuant to which its shareholders will elect whether to exchange Weyerhaeuser shares for WRECO shares. Weyerhaeuser will determine which approach it will take prior to closing the transaction and no decision has been made at this time. Regardless of the method, upon closing of the merger, Weyerhaeuser shareholders will receive approximately 80.5 percent of TRI Pointe shares, on a fully diluted basis, and pre-transaction TRI Pointe shareholders will own the balance of the combined company's shares.
Share 'cash' of 2B divided by 582M WY shares= $3.43 = .22 share of TPH per WY share IMHO.
Then how will WY account for the 700M actual cash, $1.20 per WY share?
They will probably figure out how to keep it to pay for Longview.
What will WY pps be after the 'merger'?
Seems kind of messy to me just to 'get out' of housing.
Of course, WY is all about housing and always will be.
WY is a much better company after this divestment. Housing manufacturers have a far more labor and overhead intensive business model than the timber business. Additionally, while it is hard to gauge what construction companies will be successful in 5-10+ years, whichever ones are will likely be buying materials like timber, drywall, insulation, concrete, etc.
Think of it this way: housing manufacturers are in a war with one another, and the materials suppliers are like arms dealers. You don't need to know who will win the war...all you need to know is that all participants will be buying bullets and body bags. Therefore, in so selling the manufacturing segment, WY reduces the long term risk profile, as well as its overhead and labor costs. Moreover, if the builder ends up being successful, you can have some exposure to that too, but now that business will not be unnecessarily buried in the financials of this awesome REIT.