In a news release today, Weyerhaeuser's actions confirms that it will evaluate the possibility of converting to a REIT.
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Weyerhaeuser Considers Strategic Alternatives for Containerboard, Packaging and Recycling Business
FEDERAL WAY, Wash., May 4 /PRNewswire-FirstCall/ -- Weyerhaeuser Company (NYSE: WY) today announced that its board of directors has authorized a process to consider a broad range of strategic alternatives for its Containerboard, Packaging and Recycling business. Alternatives range from continuing to hold and operate the assets to a possible sale or combination. Read the entire news release.
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Analysts have been pushing WEYCO to convert to a REIT in order to gain a more favorable tax rate for its timberland operations. WEYCO has resisted because of laws prohibiting such a move for companies with large manufacturing bases such as Weyerhaeuser. Removing the above mentioned business units from the timberlands operation will pave the way for conversion to a REIT. If this should happen, it will clearly be in the best short term interest of shareholders. It also means the end of the most successfully integrated "from forest to end profuct" company in history - MAYBE not a good thing for long-term WEYCO investors. But change happens and my feeling is that nobody, not even Weyerhaeuser, can stop the tide.
Weyerhaeuser has great people, great forest management, great timberland and will make a great REIT!
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