REIT Watch: Weyerhaeuser Stock Price Surges on Longview Timber Acquisition

RioCan REIT to Distribute C$0.1175 Dividend for June

REIT Watch: Weyerhaeuser Stock Price Surges on Longview Timber Acquisition

United States

Weyerhaeuser to Acquire 640,000 Acres of Forestland for $2.65 Billion

Weyerhaeuser (NYSE:WY), a real estate investment trust that acquires timberland, has agreed to buy Longview Timber for about $2.65 billion (₤1.69 billion) in what will become the third-largest forestry acquisition in North America. Weyerhaeuser’s stock price climbed by 3.04 percent to $29.15 in New York early morning trading today, June 17 on the news of the acquisition.

The deal, which is expected to close in July, would see the total U.S. timberlands owned by the REIT rising by 645,000 acres or about 10 percent to 6.6 million acres. "The acquired timberlands are highly complementary to our existing acreage in Washington and Oregon," Dan Fulton, president and chief executive of Weyerhaeuser, said in a statement yesterday.

“It’s a pretty big price what they’re paying for it, but it’s indicative of the quality of timber they bought,” Paul Quinn, an analyst at RBC Capital Markets, told Bloomberg in a telephone interview yesterday. “It allows them to increase the harvest level in the short term. They’ll have more cash flow to pay the dividend.”

The REIT has not revealed how much of Longview Timber’s debt it was assuming in the acquisition but said it would finance the deal by raising about $2.45 billion (₤1.56 billion) through selling debt and equity and it had arranged for an unsecured bridge loan facility with Morgan Stanley.

In a separate statement Weyerhaeuser also announced that Doyle Simons, the former chief executive officer of Temple-Inland, would succeed Fulton as CEO, effective August 1.

"As former CEO and chairman of Temple-Inland, Doyle has a proven track record of driving performance to achieve results," said Chuck Williamson, chairman of Weyerhaeuser's board of directors. "He has deep experience in the forest products industry, broad business and functional expertise and a passion for operational excellence. I know he will bring tremendous energy, vision and leadership to Weyerhaeuser

as the company continues to optimize its assets, increase efficiency and pursue sustainable growth."

Analysts on Pennsylvania REIT

Pennsylvania REIT (NYSE:PEI), a real estate investment trust that invests primarily in retail shopping malls in the eastern half of the U.S., received a price target upgrade from Barclays Capital from $18.00 to $19.00 in a research report issued to investors on Friday. The analysts gave the stock an “equal weight” rating. Shares in Pennsylvania REIT have climbed by almost ten percent in the year-to-date despite a general decline among real estate investment trusts.

One investment analyst has rated the stock with a sell rating, four have given it a hold rating and one has rated it as a “buy”. Pennsylvania REIT has an average rating of “Hold” and a consensus price target of $20.90.


RioCan REIT Announces C$0.1175 June Dividend

RioCan REIT (TSE:REI.UN), the owner of Canada’s largest portfolio of shopping centres, announced yesterday a dividend of C$0.1175 for the current month. The distribution will be paid on July 8 to shareholders of record on June 28.

Weyerhaeuser’s stock price was $29.14 as of 17.06.2013, 14.30 BST.

Pennsylvania REIT’s stock price was $19.51 as of 17.06.2013, 14.30 BST.

RioCan’s stock price was C$26.29 as of 17.06.2013, 14.30 BST.

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