International Paper IP
announced today it is in talks with Unisource regarding a proposed business
combination of xpedx, International Paper's distribution business, and
Unisource. Both xpedx and Unisource are business-to-business distributors of
printing, packaging and facility supplies. The discussions were initiated when
Unisource approached International Paper about a possible merger, and on April
19, 2013, the parties entered into a non-binding letter of intent to explore a
possible transaction.
The letter of intent outlines a "Reverse Morris Trust" transaction in which
International Paper would contribute the assets of xpedx to a newly-formed
corporation, and receive a cash dividend financed with debt in the new
corporation's capital structure. This new corporation would be spun off to
International Paper shareholders and immediately thereafter merged with
Unisource in a transaction intended to be tax-free to International Paper and
its shareholders.
The amounts of the relative ownership in the merged company by International
Paper and Unisource shareholders, and the amount of the dividend payment to
International Paper, are the subject of further negotiations between the
parties. Following the spin-off and merger, the new company would be an
independent publicly traded corporation with a majority of independent
directors. Some combination of current xpedx and Unisource management is
expected to lead the new company.
Market News and Data brought to you by Benzinga APIs© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Loading...
Benzinga simplifies the market for smarter investing
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
Join Now: Free!
Already a member?Sign in