Wednesday, October 31, 2007

Land Deals: WEYCO, GFP, Sierra Pacific, TCG, Rosboro

The following is from a WEYCO news release on WEYCO's website:

Weyerhaeuser, Global Forest Partners Complete Sale of New Zealand Assets:
"FEDERAL WAY, Wash., Oct. 31 /PRNewswire-FirstCall/ -- Weyerhaeuser Company (NYSE: WY) and Global Forest Partners today announced the completion of the sale and transfer of assets from their former joint venture to GFP sole ownership after receiving the necessary government approvals."

"Under the agreement, GFP investment funds will acquire Weyerhaeuser New Zealand, Inc., and Weyerhaeuser's interest in the Nelson JV assets. These assets include approximately 67,000 productive hectares of plantation forests in the Nelson/Marlborough region and the Kaituna sawmill at Renwick, which has a log input capacity on a single shift of 80,000 cubic meters annually."

"Terms of the agreement were not disclosed."

The following copyrighted news article is supplied with permission and the courtesy of Forestweb. You can visit their site at

Sierra Pacific acquires 140,000 acres of Washington timberland from The Campbell Group; simultaneously buys/sells off 43,000 Oregon acres to Rosboro

Oct 26, 2007 — Forestweb
By Audrey Dixon

SAN DIEGO, Calif., October 26, 2007 (Forestweb) — Sierra Pacific Industries (SPI) has acquired 140,000 acres of Washington timberlands from The Campbell Group (TCG), plus another 43,000 acres in Oregon that it simultaneously sold off to Rosboro.

Mark Pawlicki, Director of Governmental Affairs for Redding, Calif., based SPI, confirmed earlier this week the company had acquired the Washington land very recently but declined to divulge any more details.

Industry sources told Forestweb it had been a two-part transaction with TCG, and that about 40,000 acres of Oregon timberland had been sold to Springfield, Ore., based Rosboro.

Rosboro's CFO Scott Nelson confirmed Friday afternoon that his company had acquired 43,000 acres in western Oregon from SPI at the same time it completed its transaction with TCG, on September 27.

All news reports are copyrighted by the respective papers.

Tuesday, October 30, 2007

Gone Hunting!

Okay, I've been "out-of-pocket" off hunting for caribou and moose in Newfoundland (beautiful country!) for the last week and a half. Let's see what has happened since I've been gone.

Hancock sold 10,000 acres:
of Coosa River timberland for Alabama's Forever Wild Land Trust program. "The Forever Wild Program was established in 1992 by constitutional amendment to provide for the purchase of public recreational lands. Since its inception, the program has purchased 133,000 acres of land for general recreation, nature preserves and additions to Wildlife Management Areas and state parks. To learn more about the Forever Wild Program, please visit"

"The Hancock Timber Resource Group has a long history of working with communities, states and conservation groups to protect environmentally sensitive land. To date, our Sensitive Lands Program has protected approximately 320,000 acres across the United States," said Mike Wolf,director of North American Forest Operations, Hancock Timber Resource Group. Read more about it.

Speculation on Weyerhaeuser's Conversion to a REIT:
I guess this speculation is a long way from new news but there is a very informative article in Barrons. Following are a few quotes from the article (as I write, WEYCO stock is trading at about $74/share).

"BASED ON RECENT PRIVATE-MARKET transactions, Zaret, a former forester, values Weyerhaeuser's timber assets at $13 billion, or $59 a share -- just a bit under the company's stock-market value of $14.6 billion. At current prices, that means investors are getting Weyerhaeuser's other assets for a relative pittance. The timber business generated just 5% of last year's sales of $22 billion, but accounted for 64%, or $762 million, of total operating income."

"Wood products, which chipped in almost $8 billion of revenue, is Weyerhaeuser's second-most-valuable business, according to Zaret, who estimates it's worth $3.2 billion, or $15 a share. The real-estate business, whose income Zaret expects to slump 58% in '07, comes in at around $10 a share. In all, the analyst values Weyerhaeuser's parts at $103 a share, some 51% above its current price."

"This tax disadvantage prompts the market to value timber held by publicly traded C corporations at a discount to land held by REITs or private owners. Plum Creek, the largest REIT with more than eight million acres of timberland, trades for 18 times Ebitda, well above the multiple of 10 or 11 for the average paper company. Weyerhaeuser fetches eight times Ebitda."

"Timber companies could get some relief this year from Congress, which is mulling passage of the Timber Revitalization and Economic Enhancement Act. Aimed at enhancing the industry's global competitiveness, it would cut the timber-harvest tax for C corporations by 60%, to 14%."
Read "A Tribute to Timber" in Barrons.

It is a very interesting article that shows the pickle that WEYCO is in. Its tax structure has to change. Either Congress makes changes or WEYCO becomes a REIT.

Pope and Talbot Seeks Financial Protection:
"Pope and Talbot, Inc (Pink Sheets:PTBT) today announced that, in order to address its financial challenges and to support efforts to be a more efficient organization, the company and its U.S. and Canadian subsidiaries have applied for protection under the Companies' Creditors Arrangement Act (CCAA) of Canada. Pope & Talbot's Board of Directors, in a unanimous decision, directed the company to take this action as the best alternative for the long-term interests of the company, its employees, customers, creditors, business partners and other stakeholders." Read release.

Tuesday, October 16, 2007

Timberland Investment Returns

Here is a link to economist Jack Lutz' quarterly newsletter "That Was Then, This is Now". It is a very well done and interesting article on how the returns from timberland have changed over the past two decades.

In addition to timberland returns, and the "shocks" that impact them, he compares and correlates the returns to other major investment alternatives. It is well worth reading. --Brian

Friday, October 5, 2007

Phaunos Timber invests 2 mln eur in sustainable forestry in Indonesia

Phaunos Timber Fund Ltd, the UK closed-end investment company that bought Potlatch's poplar tree farm, "said it has committed a minimum initial investment of 2 mln eur and up to 4 mln eur in sustainable forestry in Indonesia, with the opportunity to scale-up the investment over time."
"These funds will be used by the scientific team working with the foundation to assist in the development and expansion of a novel closed-system of tropical forestry".

Read release.

Wednesday, October 3, 2007

43,000 Acres of Timberland for Sale

A private investor has 43,000+ acres of hardwood timberland for sale in eastern Kentucky. Partial mineral rights also available. If you are interested and would like an information packet, please email