Displaying items by tag: Templeinland INC

International Paper Company (NYSE: IP) and Temple-Inland Inc. (NYSE: TIN) has announced that they have agreed to extend the U.S. Department of Justice's ("DOJ") review period with respect to International Paper's acquisition of Temple-Inland until February 13, 2012 to provide the parties with time to enter into binding documentation to resolve the DOJ's concerns with respect to the pending transaction.

International Paper Chairman and CEO John Faraci said, "We have been working constructively with the DOJ to address their concerns and anticipate entering into a definitive agreement on terms that are acceptable to all parties.  The acquisition of Temple-Inland is a compelling value proposition for International Paper shareholders, and will create numerous benefits for our customers and employees."

SOURCE International Paper

Temple-Inland Inc. has provided an update on the shutdown of its Bogalusa, Louisiana paper mill following an operational issue at the mill and its waste-water treatment facility.

Predictive testing for Biochemical Oxygen Demand (BOD) indicated that the Bogalusa mill would exceed its maximum daily permit levels for discharge to the Pearl River from the mill's waste-water treatment facility. The Company believes that this exceedance may have depleted the oxygen level in part of the river below that necessary to sustain a healthy fish population and resulted in a fish kill.

On Saturday, August 13, 2011, upon receiving the results of predictive testing, Temple-Inland immediately shut down the mill. The Company promptly informed the Louisiana Department of Environmental Quality (DEQ) of the situation and began taking corrective actions to restore the water quality of the River.

Temple-Inland's Chairman and CEO Doyle R. Simons said, "The health of the Pearl River and surrounding communities are our utmost concerns. Temple-Inland has a strong environmental record and we sincerely regret this incident, which is contrary to our culture of good community stewardship as both an employer and a resident of Bogalusa and the State of Louisiana.

"We never lose sight that we are members and supporters of the Bogalusa area and apologize for the impact this issue at the mill has had on the Pearl River, its aqua culture and surrounding communities. We are working diligently and expeditiously to remove the fish kill and restore the quality of the River," Simons concluded.

International Paper (NYSE: IP) and Temple-Inland Inc. (NYSE: TIN) have announced that they have entered into a definitive merger agreement under which International Paper will acquire all of the outstanding common stock of Temple-Inland for $32.00 per share in cash, plus the assumption of $600 million in Temple-Inland's year end debt. The total transaction value is approximately $4.3 billion.

The combination, which has been approved by the Boards of both companies, brings together two strong North American corrugated packaging businesses to create an even stronger company. It offers numerous benefits for the shareholders and customers of both companies, and is consistent with International Paper's focus on achieving and sustaining cost of capital returns throughout the cycle. The transaction is expected to be accretive to International Paper's shareholders in year one after closing. It is expected to close in the first quarter of 2012.

International Paper Chairman and CEO John Faraci said, "The strategic benefits of this combination are clear and we are pleased to be able to move forward on terms that are financially attractive for both sets of shareholders. Acquiring Temple-Inland enhances our ability to generate additional cash flow while maintaining our strong balance sheet. We look forward to working with the employees of Temple-Inland as we integrate our businesses and create an even stronger company with substantial benefits for our customers, employees and shareholders."

Temple-Inland Chairman and Chief Executive Officer Doyle R. Simons said, "This transaction creates value for both Temple-Inland and International Paper shareholders. The combined company will be positioned to be a leader in providing high quality products for its customers."

The combination is expected to yield synergies of approximately $300 million annually within 24 months of closing, derived primarily from the areas of operations, freight, logistics, selling expense and overhead. The companies have a shared focus on low-cost mills, complementary converting systems and high levels of box integration - Temple-Inland's products and manufacturing facilities are an excellent strategic fit with International Paper's current offerings and facilities.

As contemplated by the merger agreement, International Paper will terminate its existing tender offer to acquire all of the outstanding common shares of Temple-Inland for $30.60 per share, and Temple-Inland will hold a special meeting of its stockholders to vote on the transaction. In addition to the approval of Temple-Inland's stockholders, the transaction is subject to customary closing conditions, including antitrust approvals.

Evercore Partners and UBS Investment Bank served as financial advisors to International Paper and Goldman, Sachs & Co. served as financial advisor to Temple-Inland. Debevoise & Plimpton LLP served as International Paper's legal counsel and Temple-Inland was advised by Wachtell, Lipton, Rosen & Katz.

SOURCE International Paper

Temple-Inland Inc. (NYSE: TIN) today provided an update on the shutdown of its Bogalusa, Louisiana paper mill following an operational issue at the mill and its waste-water treatment facility.

Predictive testing for Biochemical Oxygen Demand (BOD) indicated that the Bogalusa mill would exceed its maximum daily permit levels for discharge to the Pearl River from the mill's waste-water treatment facility. The Company believes that this exceedance may have depleted the oxygen level in part of the river below that necessary to sustain a healthy fish population and resulted in a fish kill.

On Saturday, August 13, 2011, upon receiving the results of predictive testing, Temple-Inland immediately shut down the mill. The Company promptly informed the Louisiana Department of Environmental Quality (DEQ) of the situation and began taking corrective actions to restore the water quality of the River.

Temple-Inland's Chairman and CEO Doyle R. Simons said, "The health of the Pearl River and surrounding communities are our utmost concerns. Temple-Inland has a strong environmental record and we sincerely regret this incident, which is contrary to our culture of good community stewardship as both an employer and a resident of Bogalusa and the State of Louisiana.

"We never lose sight that we are members and supporters of the Bogalusa area and apologize for the impact this issue at the mill has had on the Pearl River, its aqua culture and surrounding communities. We are working diligently and expeditiously to remove the fish kill and restore the quality of the River," Simons concluded.

International Paper has announced that it has determined to extend the expiration date for now of its tender offer for all outstanding common shares of Temple-Inland Inc. (NYSE: TIN) for $30.60 in cash. Accordingly, the offer and withdrawal rights are now scheduled to expire at 5 p.m., Eastern Time on September 8, 2011, unless further extended. The tender offer was previously scheduled to expire at 5 p.m., Eastern Time on Aug. 9, 2011.

Based on a preliminary count by the depositary for the tender offer, approximately 8.5 million shares of Temple-Inland common stock have been tendered and not withdrawn to date. Except for the extension of the expiration date, all other terms and conditions of the tender offer remain unchanged. If the tender offer is extended further, International Paper will issue a press release announcing the extension at or before 9 a.m., Eastern Time, on the next business day after the date the tender offer was scheduled to expire.

Temple Inland's stockholders may obtain copies of all of the offering documents free of charge at the SEC's website (www.sec.gov) or by directly requesting copies of all of the offering documents free of charge at Innisfree M&A Incorporated, the Information Agent for the offer, at (877) 456-3488 (toll-free). Banks and brokers may call collect at (212) 750-5833.

International Paper's dealer managers for the tender offer are UBS Investment Bank and Evercore Partners. Its legal advisor is Debevoise & Plimpton LLP.

SOURCE International Paper

Board of Directors Unanimously Determines that IP's Offer Grossly Undervalues Temple-Inland and Urges Stockholders Not to Tender Shares Pursuant to IP's Offer

Temple-Inland Inc. today announced that its Board of Directors, after careful consideration with its independent financial and legal advisors, voted unanimously to reject the unsolicited tender offer from International Paper Company to acquire all outstanding common shares of Temple-Inland at a price of $30.60 per share in cash. The Board unanimously determined that the offer grossly undervalues Temple-Inland and is not in the best interests of Temple-Inland's stockholders.

The Board unanimously recommends that Temple-Inland stockholders not tender their shares into IP's offer.

The basis for the Board's recommendation with respect to IP's tender offer is set forth in Temple-Inland's Schedule 14D-9, filed today with the Securities and Exchange Commission ("SEC"), a copy of which is available at www.sec.gov and on Temple-Inland's website at www.templeinland.com.

"Since we launched the 'new' Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers, building products peers, and the S&P 500. The Temple-Inland Board is unanimous in its belief that the offer grossly undervalues Temple-Inland and its prospects, including its position as the return on asset leader in the corrugated packaging industry, expected benefits from box plant transformation, its low-cost building products operation, and its strategic place within the industry as the third largest producer of corrugated packaging in North America," said Doyle R. Simons, Chairman and Chief Executive Officer of Temple-Inland.

As fully outlined in Temple-Inland's Schedule 14D-9, Temple-Inland's Board recommends that Temple-Inland stockholders not tender their shares into IP's offer because:

• International Paper's unsolicited offer grossly undervalues Temple-Inland and its future prospects:
  • The Board believes Temple-Inland's accelerating growth of earnings and return on investment will result in superior value to Temple-Inland's stockholders as compared to the price being offered by IP.
  • IP overstates Temple-Inland's net debt. The Company's net debt at the end of first quarter 2011 was $737 million, not $828 million as IP calculated for purposes of pricing its offer.
  • IP wrongly characterizes Temple-Inland's timber financing transaction as a liability rather than an asset. IP appears to have considered only one aspect of the transaction, the present value of the settlement of the tax on the deferred gain, and ignored the remaining positive components (including alternative minimum tax credits) of the transaction, which together result in a net benefit.
  • IP's offer fails to appropriately compensate Temple-Inland stockholders for the very significant synergies that IP would realize and the extraordinary level of earnings accretion that would result if an IP/Temple-Inland transaction were to occur.
  • IP seeks to compare its offer price to valuation metrics from so-called "precedent" transactions that involved underperforming assets of other companies that are not comparable to Temple-Inland and its industry-leading returns, high-quality assets and low-cost structure.
  • IP's offer does not appropriately reflect the fundamental changes and improved focus in the corrugated packaging industry. These fundamental changes and improved industry focus are expected to be beneficial to Temple-Inland, which, as a result of its strong position in the corrugated packaging industry and its low-cost operations, is well positioned to continue to achieve improving results.
  • Temple-Inland is the largest remaining independent, publicly-held industry participant whose acquisition would fundamentally transform the industry, and IP's offer does not appropriately compensate Temple-Inland's stockholders for that strategic value.

• The timing of International Paper's unsolicited proposal is extremely opportunistic and disadvantageous to Temple-Inland stockholders:
  • Housing markets are at historically low levels, temporarily depressing the value of our building products operations. IP is attempting to take advantage of our stockholders by moving to grab Temple-Inland at a bargain price at a time when there is little or no market value being ascribed to building products.
  • As IP itself has consistently highlighted to the investment community, corrugated packaging demand remains below prerecession levels, but is expected to recover in the near future as the economy continues to improve. IP is attempting by its offer to acquire Temple-Inland before corrugated packaging demand returns to prerecession levels and pricing further improves.
  • We estimate that $90 million of the annual cost savings from our Box Plant Transformation II project are still to be realized - our stockholders, not IP's, deserve to receive the benefit of the significant capital we have invested in this project.
  • IP initially publicized its proposal to acquire Temple-Inland during a period of market weakness in order to claim an inflated "premium".

• The potential acquisition is subject to regulatory and other uncertainty:
  • IP is proposing a combination of the largest and third largest producers of corrugated packaging in North America.
  • Given the regulatory uncertainty and the significant conditionality of IP's offer, there is considerable uncertainty regarding the offer and the timing of Temple-Inland stockholders receiving the "certain" value that IP claims to be offering.

As noted above, the Company's Schedule 14D-9 is available on the SEC's website, www.sec.gov. In addition, the Schedule 14D-9 and other materials related to IP's unsolicited proposal are available in the "Investor Relations" section of the Company's website at www.templeinland.com. The Company urges stockholders to read the Schedule 14D-9 carefully and in its entirety.

Goldman, Sachs & Co. is acting as financial advisor to Temple-Inland, and Wachtell, Lipton, Rosen & Katz is acting as Temple-Inland's legal counsel.

SOURCE: Temple-Inland Inc.

Temple-Inland Inc. has acknowledged that International Paper Company (NYSE: IP) announced that it will be commencing an unsolicited offer to acquire all of the outstanding shares of common stock of Temple-Inland for a price of $30.60 per Temple-Inland share in cash.

Consistent with its fiduciary duties and as required by applicable law, Temple-Inland's Board of Directors will review the offer to determine the course of action that it believes is in the best interests of the Company and its stockholders. Temple-Inland's stockholders are advised to take no action at this time pending conclusion of the review of the tender offer by Temple-Inland's Board of Directors.

Temple-Inland's Board of Directors, in consultation with its independent financial and legal advisors, intends to advise stockholders of its formal position regarding the announced offer within ten business days from the date of commencement of the unsolicited tender offer by making available to stockholders and filing with the U.S. Securities and Exchange Commission (the "SEC") a Solicitation/Recommendation Statement on Schedule 14D-9.

Goldman, Sachs & Co. is acting as financial advisor to Temple-Inland, and Wachtell, Lipton, Rosen & Katz is acting as Temple-Inland's legal counsel.

International Paper Company announced yesturday that it is commencing a fully financed tender offer for all outstanding common shares of Temple-Inland Inc. (NYSE: TIN) for $30.60 per share in cash. The all-cash offer represents a 46% premium to Temple-Inland's closing price on June 6, 2011, the last trading day prior to public disclosure of International Paper's proposal to acquire Temple-Inland. The offer will commence tomorrow and will expire at 5:00 p.m.New York City time on August 9, 2011, unless extended.

International Paper chairman and CEO John Faraci said, "We believe Temple-Inland's price expectations are unrealistic and their unwillingness to engage in any meaningful discussions with respect to value has left us with no alternative but to make our offer directly to Temple-Inland shareholders. While we prefer to reach a negotiated, friendly deal, we are committed to remaining disciplined and completing this transaction at a fair price for both companies' shareholders. We are confident in our ability to secure the necessary regulatory approvals to complete this transaction in a timely manner."

Faraci continued, "We respect Temple-Inland, but we disagree on the realistic standalone value of the company, which we believe is currently $21 to $24 per share. The premium we are offering is substantial, the multiple is well above recent directly comparable transactions, and we are providing Temple-Inland shareholders the certainty of cash in the midst of a very uncertain economic environment. At $30.60, we believe our offer fully reflects the future business plans and economic outlook for Temple-Inland and for the sector, including the current environment and outlook for containerboard, the potential cyclical improvement in Temple-Inland's building products segment and near-term expected increases in Temple-Inland's earnings. We are confident that Temple-Inland shareholders support a transaction, and it is now incumbent upon the Temple-Inland Board to take the next step."

International Paper noted that its fully financed, all-cash offer represents compelling value when compared against all reasonable metrics and precedents, including:

• -A 46% premium to Temple-Inland's closing price of $21.01 on June 6, 2011, the last trading day prior to public disclosure of the offer
• -A 30% premium over the present value of average analyst price targets for a standalone Temple-Inland of $23.57
• -A highly attractive multiple of 9.8x Temple-Inland's 2011 estimated EBITDA (9.0x excluding timber tax liability) versus forward EBITDA multiples of recent precedent transactions of -6.1x for Smurfit-Stone and 6.3x for Weyerhaeuser's corrugated packaging business, and well above Temple-Inland's average forward EBITDA multiple of 6.1x since 2008
• -The fact that IBES research estimates for Temple-Inland's EBITDA have come down since International Paper's proposal was made public, given market expectations
• -A significant premium to Temple-Inland's standalone value which, based on pre-offer trading and independent analyst estimates of Temple-Inland's earnings potential, International -Paper and third parties credibly estimate at $21 to $24 per share. This compares to Temple-Inland's contention that standalone value should reflect multiple expansion to near 7x applied to an above-average estimated EBITDA for 2012 - a view we believe neither investors nor third parties share
• -Realization of the benefits from a potential cyclical improvement in Temple-Inland's building products segment, even with a recovery uncertain and likely years away
• -The benefits of more than half of the synergies that are expected to result from the combination
• -The certainty of cash, versus the uncertainty of any potential future benefits to shareholders that Temple-Inland's current business plan may, or may not, deliver through cyclical and operational improvement

International Paper has secured committed financing from UBS Investment Bank, and the offer will not be conditioned on financing. The offer will be conditioned on there being validly tendered and not withdrawn at least a majority of the total number of Temple-Inland shares outstanding on a fully diluted basis, Temple-Inland's Board of Directors redeeming or invalidating its "poison pill" shareholder rights plan, the receipt of regulatory approvals and other customary closing conditions as described in the Offer to Purchase.

International Paper also is filing notification tomorrow with the Federal Trade Commission ("FTC") and Department of Justice ("DOJ") as required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR). The HSR waiting period will expire on July 27, 2011 unless extended by the FTC or DOJ, which would not be unusual in these circumstances.

The Offer to Purchase, Letter of Transmittal and related documents will be filed tomorrow with the U.S. Securities and Exchange Commission (SEC). Temple-Inland's stockholders may obtain copies of all of the offering documents free of charge at the SEC's website (www.sec.gov) or by directly requesting copies of all of the offering documents free of charge at Innisfree M&A Incorporated, the Information Agent for the offer, at (877) 456-3488 (toll-free). Banks and brokers may call collect at (212) 750-5833. The tender offer will expire at 5:00 p.m.New York City time on August 9, 2011, unless extended in the manner set forth in the Offer to Purchase.

International Paper's dealer managers for the tender offer are UBS Investment Bank and Evercore Partners. Its legal advisor is Debevoise & Plimpton LLP.

The Board of Directors of Temple-Inland Inc. has adopted a stockholder rights plan and declared a dividend distribution of one Preferred Share Purchase Right on each outstanding share of Temple-Inland common stock.

Doyle R. Simons, Chairman and Chief Executive Officer of Temple-Inland Inc., said: "The Rights are designed to assure that all of Temple-Inland's stockholders receive fair and equal treatment in the event of any proposed takeover of the Company, to guard against abusive tactics to gain control of Temple-Inland without paying all stockholders a premium for that control, and to enable all Temple-Inland stockholders to realize the long-term value of their investment in the Company.

"In this regard, the Temple-Inland Board of Directors unanimously determined that International Paper's proposal announced yesterday to acquire the Company grossly undervalues Temple-Inland and its future prospects and is not in the best interests of Temple-Inland stockholders."

The Rights will be exercisable only if a person or group acquires 10% or more of Temple-Inland's common stock. Each Right will entitle stockholders to buy one one-hundredth of a share of a new series of junior participating preferred stock at an exercise price of $120.

If a person or group acquires 10% or more of Temple-Inland's outstanding common stock, each Right will entitle its holder (other than such person or members of such group) to purchase, at the Right's then-current exercise price, a number of Temple-Inland's common shares having a market value of twice such price. In addition, if Temple-Inland is acquired in a merger or other business combination transaction after a person has acquired 10% or more of the Company's outstanding common stock, each Right will entitle its holder to purchase, at the Right's then-current exercise price, a number of the acquiring company's common shares having a market value of twice such price. The acquiring person will not be entitled to exercise these Rights.

Prior to the acquisition by a person or group of beneficial ownership of 10% or more of the Company's common stock, the Rights are redeemable for one cent per Right at the option of the Board of Directors.

Certain synthetic interests in securities created by derivative positions -- whether or not such interests are considered to be ownership of the underlying common stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act -- are treated as beneficial ownership of the number of shares of the company's common stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of the company's stock are directly or indirectly held by counterparties to the derivatives contracts.

The dividend distribution will be made on June 17, 2011, payable to stockholders of record as of the close of business on that date, and is not taxable to stockholders. The Rights will expire on June 7, 2016.

Temple-Inland Inc. (NYSE: TIN) announced today that it received an unsolicited proposal from International Paper Company (NYSE: IP) to acquire the Company for $30.60 per Temple-Inland share in cash. Temple-Inland's Board of Directors, after careful consideration with its independent financial and legal advisors, voted unanimously to reject International Paper's proposal after the Board determined unanimously that the proposal grossly undervalues Temple-Inland and is not in the best interest of Temple-Inland's stockholders.

The Board authorized Doyle R. Simons, Chairman and CEO of Temple-Inland, to communicate its rejection to John Faraci, International Paper's Chairman and CEO. A copy of Mr. Simons's letter to Mr. Faraci is incorporated into this news release.

"Since we launched the 'new' Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers (including IP), building products peers, and the S&P 500. Since that time, our total return to stockholders of 22% greatly exceeds the 5% total return that IP has achieved. Through our proven ability to execute our strategy focused on maximizing return on investment (ROI) and profitably growing our business, the Board believes the Company will continue to provide superior results for our stockholders," said Mr. Simons. "As the economic recovery continues and the benefits from our strategy continue to be realized, it is the stockholders of Temple-Inland who should gain from those anticipated benefits, not the stockholders of IP."

In its review of International Paper's unsolicited proposal, the Temple-Inland Board considered a number of factors and came to the following conclusions:

• International Paper's unsolicited proposal grossly undervalues Temple-Inland and its future prospects:
  • Based on the Company's internal estimates, as well as Wall Street consensus estimates, the Board believes the Company's accelerating growth of earnings and ROI will result in superior value to that offered by International Paper in a sale transaction.
  • International Paper's claims about its proposal rely on valuation metrics from "precedent" transactions that involved underperforming assets that are not comparable to Temple-Inland and its industry-leading returns, high-quality assets and low-cost structure.
  • The retrospective focus of these "comparables" does not take account of the profound changes that are occurring in the corrugated packaging industry, which have led to reduced pricing volatility, higher average prices, and widely-held expectations that these positive industry trends will continue.
  • The proposal fails to reflect the significant value the Company's box plant transformation II project will generate for Temple-Inland and its stockholders.
  • International Paper overstates the Company's actual net debt by $91 million and the net present value of our timber financing liability by at least $200 million.

• The timing of International Paper's unsolicited proposal is extremely opportunistic and disadvantageous to Temple-Inland stockholders:
  • Housing markets are at historically low levels, temporarily depressing the value of our building products operations. International Paper is attempting to take advantage of our stockholders by moving to grab the Company at a bargain price at a time when there is little or no market value being ascribed to building products.
  • As International Paper has consistently highlighted to the investment community, corrugated packaging demand remains below prerecession levels, but is expected to recover as the economy continues to improve. International Paper is attempting to time its offer before corrugated packaging demand returns to prerecession levels and pricing improves as expected by industry analysts.
  • An estimated $90 million of the annual cost savings from our box plant transformation II are still ahead of us - our stockholders, not the stockholders of International Paper, deserve to receive the benefit of the significant capital we have invested in this project.

• The potential acquisition will likely face prolonged and rigorous investigation by antitrust authorities and an uncertain outcome:
  • A combined company would control an almost 40% share of North American containerboard capacity.
  • Given the expected scrutiny by U.S. antitrust authorities, it is likely that a potential transaction would require a significant amount of time to complete, even under the most favorable circumstances.

A presentation providing additional information about Temple-Inland and the reasons the Temple-Inland Board rejected International Paper's proposal will be posted in the Investor Relations section of our website and filed with the SEC.

Goldman, Sachs & Co. is acting as financial advisor to Temple-Inland, and Wachtell, Lipton, Rosen & Katz is acting as Temple-Inland's legal counsel.

The text of Mr. Simons's June 4, 2011 letter to Mr. Faraci is set forth below:

Dear John:

The Board of Directors of Temple-Inland has received your letters dated May 19 and May 27, 2011 containing IP's proposal to acquire all of the outstanding shares of Temple-Inland for $30.60 per share in cash.The Board has also considered the additional information you provided me at our meeting held at your request on May 26.Earlier today, the Temple-Inland Board of Directors convened and carefully reviewed your company's proposal with the assistance of its financial advisor, Goldman, Sachs & Co., and its legal counsel, Wachtell, Lipton, Rosen & Katz.After thorough consideration, it is the unanimous view of the Temple-Inland Board of Directors that your unsolicited proposal grossly undervalues Temple-Inland and its future prospects.Accordingly, the Temple-Inland Board unanimously rejects IP's proposal of $30.60 per share.

Since we launched the "new" Temple-Inland in January 2008, we have delivered superior results to our stockholders compared with our corrugated packaging peers (including IP), building products peers, and the S&P 500.Since that time, our total returns to stockholders of 22% greatly exceed the 5% total return that IP has achieved.Through our proven ability to execute our strategy focused on maximizing return on investment (ROI) and profitably growing our business, the Board believes the Company will continue to provide superior results for our stockholders.

A key part of our strategy is to maximize ROI, because we believe ROI is fundamental to driving stockholder value.In corrugated packaging, we generated record ROI of 16.5% in 2009 and 2010 and are positioned to generate significantly higher levels of ROI in 2011 and beyond due to fundamental changes in the industry and benefits from our box plant transformation. Indeed, we are now achieving the highest returns on assets in the corrugated packaging industry.Despite the worst housing markets since the Great Depression, our low-cost building products operation has continued to generate positive cash flow throughout the downturn and is positioned to generate very high levels of return for our stockholders when housing markets recover.As the economic recovery continues and the benefits from our strategy continue to be realized, it is the stockholders of Temple-Inland who should benefit from our company's very strong prospects, not the stockholders of IP.

We take issue with a number of claims in the materials you have provided to us.You have overstated our net debt by $91 million (which was $737 million as of March 31, 2011, rather than the $828 million stated in your proposal) and the net present value of our timber finance liability by at least $200 million.More significantly, the "comparable" transactions you cite are simply not comparable -- those transactions involved troubled or struggling companies or operations rather than a company such as Temple-Inland with its industry-leading returns, high-quality assets and low-cost structure.Further, the retrospective focus of these "comparables" does not take account of the profound changes that are occurring in the corrugated packaging industry, which have led to reduced pricing volatility, higher average prices and widely-held expectations that these positive industry trends will continue.

Your own public statements acknowledge the changes in the industry and make clear that "looking back at history" is not the correct way to understand the corrugated packaging industry's future.If, as you so clearly state, the past is not prologue for your company, neither is it for ours.We believe that it is for this reason that your letter of May 27 insistently says "Timing and speed are important," and you have threatened us with a hostile bid if we do not respond by your deadline.The speed that is "important" to you underscores an opportunistic attempt to deprive our stockholders of the value in their company that we believe will become increasingly evident as the benefits of profound change in the corrugated packaging industry, Box Plant Transformation II and our extremely low-cost building products business accrue to the benefit of our stockholders.Finally, the "certain" value you refer to overlooks the serious regulatory issues of your proposal, an attempt to forcibly combine the #1 and #3 participants in the corrugated packaging industry with the result that your company would have an approximate 40% share of industry capacity, nearly double the next largest competitor.

Our Board of Directors, our management team and our employees are dedicated to creating value for all of our stockholders, which we expect to do by continuing to effectively execute on our strategic plan.

Sincerely,

Doyle R. Simons