Weyerhaeuser commences split-off exchange offer for WRECO in connection with transaction with TRI Pointe (5/22/14)
FEDERAL WAY, Wash., May 22, 2014 /PRNewswire/ -- Weyerhaeuser Company (NYSE: WY) today announced that it has commenced its exchange offer related to the split-off transaction of its homebuilding business, Weyerhaeuser Real Estate Company ("WRECO"). The exchange offer is in connection with the "Reverse Morris Trust" transaction, previously announced on November 4, 2013, pursuant to which a wholly owned subsidiary of TRI Pointe Homes, Inc. (NYSE: TPH) ("TRI Pointe") will merge with and into WRECO, with WRECO surviving the merger and becoming a wholly owned subsidiary of TRI Pointe. The exchange is expected to be tax-free to participating Weyerhaeuser shareholders for U.S. federal income tax purposes.
Key elements of the exchange offer:
•Weyerhaeuser shareholders have the option to exchange all, some or none of their Weyerhaeuser common shares for WRECO common shares, subject to proration as described below. In the combination, WRECO common shares will convert automatically into the right to receive shares of TRI Pointe common stock.
•Tendering Weyerhaeuser shareholders are expected to ultimately receive approximately $1.11 of shares of TRI Pointe common stock for every $1.00 of Weyerhaeuser common shares tendered, subject to the upper limit described below.
•Weyerhaeuser will determine the prices at which Weyerhaeuser common shares and WRECO common shares (and ultimately TRI Pointe common stock) will be exchanged by reference to the simple arithmetic average of the daily volume-weighted average prices of Weyerhaeuser common shares and TRI Pointe common stock, respectively, on the New York Stock Exchange on each of the last three trading days of the exchange offer.
•Weyerhaeuser expects to issue 100,000,000 WRECO common shares in the exchange offer (which will convert into 129,700,000 shares of TRI Pointe common stock). The number of Weyerhaeuser common shares that will be accepted in the exchange offer will depend on the final exchange ratio and the number of Weyerhaeuser common shares tendered.
•The exchange offer and withdrawal rights are scheduled to expire at 12:00 midnight, New York City time, on June 30, 2014, unless the exchange offer is extended or terminated.
The exchange offer is designed to permit Weyerhaeuser shareholders to exchange their Weyerhaeuser common shares for WRECO common shares (which will convert into shares of TRI Pointe common stock) at a discount of 10 percent to the per-share value of TRI Pointe common stock, subject to an upper limit described below. This discount means that tendering Weyerhaeuser shareholders are expected to ultimately receive approximately $1.11 of shares of TRI Pointe common stock for every $1.00 of Weyerhaeuser common shares tendered and accepted in the exchange offer. The upper limit in the exchange offer will be 1.7003 WRECO common shares, or 2.2053 shares of TRI Pointe common stock (based on the 1.297 shares of TRI Pointe common stock into which each WRECO common share will convert), for each Weyerhaeuser common share tendered in the exchange offer.
The shares of TRI Pointe common stock issued in the merger are expected to represent approximately 79.6 percent of the TRI Pointe common stock that will be outstanding immediately after the merger.
If the upper limit is reached as of the initial expiration of the exchange offer, then the exchange offer will be subject to a mandatory extension of two trading days following the originally contemplated expiration date, as described in the exchange offer materials being sent to Weyerhaeuser shareholders.
The final exchange ratio showing the number of WRECO common shares (which will convert into shares of TRI Pointe common stock) that Weyerhaeuser shareholders participating in the exchange offer will receive for each WRECO common share accepted for exchange will be announced by news release no later than 4:30 p.m., New York City time, on the expiration date (unless the exchange offer is extended). The exchange offer will expire at 12:00 midnight, New York City time, on June 30, 2014, unless terminated or extended, and the closing of the merger of the TRI Pointe subsidiary with and into WRECO is expected to occur soon after completion of the exchange offer. The transactions are subject to customary closing conditions, including TRI Pointe stockholder approval. TRI Pointe has scheduled a meeting of shareholders to be held on June 23, 2014 to approve the issuance of TRI Pointe common stock in the transaction. As a result of the exchange offer, the number of Weyerhaeuser's outstanding shares will be reduced.
The exchange offer will be subject to proration if the exchange offer is oversubscribed, and the number of shares accepted in the exchange offer may be fewer than the number of shares tendered.
If the exchange offer is consummated but not fully subscribed, then the remaining WRECO common shares owned by Weyerhaeuser will be distributed on a pro rata basis to Weyerhaeuser shareholders whose Weyerhaeuser common shares remain outstanding after the consummation of the exchange offer.
About Weyerhaeuser
Weyerhaeuser Company, a Washington corporation, is one of the world's largest private owners of timberlands. Weyerhaeuser owns or controls nearly seven million acres of timberlands, primarily in the U.S., and manages another 13.9 million acres under long-term licenses in Canada. It manages these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. Weyerhaeuser is also one of the largest manufacturers of wood and specialty cellulose fibers products, and through WRECO it develops real estate, primarily as a builder of single-family homes. Weyerhaeuser is a real estate investment trust. Its business segments are timberlands (which includes logs, chips and timber), wood products (which includes softwood lumber, plywood, veneer, oriented strand board, hardwood lumber, engineered lumber, raw materials and building materials distribution), cellulose fibers (which includes fluff pulp, liquid packaging board and paper products) and real estate. Weyerhaeuser generated revenues of $2.0 billion during the three months ended March 31, 2014 and $8.5 billion during the year ended December 31, 2013. Weyerhaeuser is listed on the Dow Jones World Sustainability Index, and the company's common stock trades on the New York Stock Exchange under the symbol WY.
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