Shareholders of Boise Inc., a maker of packaging and paper products, are being offered a 26 per cent premium to their stock price on Friday. Shares of the Boise, Idaho-based company jumped in premarket trading on Monday.
If the deal is completed, Packaging Corp.'s containerboard capacity will rise to 3.7 million tons from 2.6 million tons. Its corrugated products volume will increase about 30 per cent. The company will also broaden its geographic reach to the Pacific Northwest.
Both companies' boards unanimously approved the acquisition, which is expected to close in the fourth quarter.
Lake Forest, Ill.-based Packaging Corp. will pay $12.55 per share, a 26 per cent premium to Boise's $9.96 closing price on Friday. Shares of Boise gained $2.53, or 25.4 per cent, to $12.49 before the opening bell.
Packaging Corp.'s stock rose $5.95, or 10.9 per cent, to $60.50 in premarket trading.
The companies put the deal's total value at approximately $2 billion, which includes $714 million of Boise's outstanding debt.
Boise currently has about 100.9 million outstanding shares, according to FactSet.
The transaction is anticipated to immediately add to earnings.
A Packaging Corp. affiliate will start a tender offer to acquire Boise's stock. The tender offer must be started within 10 days and remain open for at least 20 business days after launch.