In an effort to raise funds from the capital market, Weyerhaeuser Company (WY), recently announced the public offering of its common shares and convertible preference shares. The offering will be completed on Jun 24, 2013, subject to closing conditions.
The offerings include approximately 29 million of Weyerhaeuser’s common shares and 12 million of its 6.375% Mandatory Convertible Preference Shares. The common shares have been priced at $27.75 per share, while the price for Convertible Preference Shares has been fixed at $50.00 per share.
In addition to these public offerings, Weyerhaeuser will allow the underwriters to purchase up to 4.35 million common shares and 1.8 million of Mandatory Convertible Preference Shares.
These common shares and preference shares offerings are likely to fetch Weyerhaeuser roughly $805 million of gross proceeds and $581 million in net proceeds or $668 million if the underwriters exercise their option.
Weyerhaeuser intends to use the proceeds from these offerings to fund the acquisition of Longview Timber LLC from Brookfield Asset Management Inc. The $2.65 billion transaction will add approximately 645,000 acres of timberland to the company’s Washington and Oregon asset base.
Post the acquisition, the company’s timberland assets in Pacific Northwest will reach 2.6 million acres, up 33%, while Weyerhaeuser’s total ownership of the U.S. timberlands will be roughly 6.6 million acres. The transaction is expected to be completed by Jul 2013 and is subject to closing conditions.
Weyerhaeuser currently carries a Zacks Rank #2 (Buy). Other stocks to watch out for in the industry are Boise Cascade Company (BCC), Potlatch Corporation (PCH) and Universal Forest Products Inc. (UFPI).
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