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Packaging company shares rise on Boise deal

The Associated Press

The shares of a number of paper and packaging makers jumped Monday after Boise Inc. agreed to be sold to Packaging Corp. of America for $1.27 billion.

It appears investors are hopeful that there will be further consolidation in the industry.

Packaging Corp. will pay $12.55 per share, a 26 percent premium to Boise's $9.96 closing price Friday. The companies put the deal's total value at approximately $2 billion, which includes $714 million of Boise's outstanding debt.

Boise shares jumped $2.61, a more than 26 percent increase, to $12.57 by early afternoon Monday.

Competitors got a boost, too.

Rock-Tenn Co. shares increased $5.94, a nearly 5 percent increase, to $124.61. KapStone Paper and Packaging Corp. shares increased $4.04, nearly 9 percent, to $49.18. Domtar Corp. shares added 94 cents to reach $77.01. And International Paper Co. shares increased 91 cents, nearly 2 percent, to $49.58.