Monday, January 22, 2007

Icahn Accumultaes 6.73% Stake in Temple-Inland (TIN); Wants Company to Divest or Spin-Off Component Businesses

In a 13D filing on Temple-Inland Inc. (NYSE: TIN) Carl Icahn disclosed a 6.73% stake (7.2 million shares). Icahn said the stock is undervalued due to the conglomerate structure of the company. Icahn plans to recommend a divestiture or spin-off of one or more of the Company's component businesses.

The aggregate purchase price of the 7,201,939 Shares purchased by High River, Icahn Master and Icahn Partners, collectively, was $301,187,629.

From the 'Purpose of Transaction' section of the filing: "The Reporting Persons acquired their positions in the Shares in the belief that they were undervalued due to, among other things, the conglomerate structure of the Issuer in which various disparate and non-complementary businesses are combined under one corporate umbrella. The Reporting Persons believe that this structure obfuscates the true value of the Issuer's assets and note that various analysts have issued sum of the parts analyses that imply a value for the Shares that is significantly higher than their current market price. The Reporting Persons intend to seek to have conversations with members of the Issuer's management to discuss ideas that management and the Reporting Persons may have to enhance shareholder value, which may include, among other things, the divestiture or spin-off of one or more of the Issuer's component businesses (which may include Guaranty Bank, the corrugated packaging business, timberland holdings, the building products business and/or the real estate division). The Reporting Persons may consider engaging in a proxy contest to attempt to replace one or more members of the Issuer's staggered board of directors with persons nominated by the Reporting Persons, but have as yet made no definite decision to do so."

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