The Containerboard Wars

Forgive me for having flashbacks to the arduous and unsuccessful battleAir Productsand Chemicals waged to acquire Airgas, but International Paper's unsolicited bid for Temple-Inland is bringing back some bad memories, and not just because it’s in an industry that does little to excite the imagination.

The 40 percent premium, the immediate rejection, and most importantly the prospect that this could go one for a year without any resolution are reminiscent of Air Products' failed bid.

And just as Air Products may have identified value for a market that wasn’t properly according it to shares of Airgas , so, too, has IP validated a far higher market price for TIN.

But there’s a reason those shares are trading a dollar below the $30.60 offered, and that’s because IP won’t be able to even try to remove some of the company’s board for a year, not to mention that if it eventually does succeed here, there seem to be some legitimate anti-trust questions about creating a 38 percent market share player in the containerboard business.

I asked IP’s CEO John Faraci for some insight on why now and how IP would prevail, but didn’t get much in the way of answers.

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