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"RICHMOND, VA – August 24, 2007 – In continuation of its land management strategy, MeadWestvaco Corporation (NYSE: MWV) today announced a definitive agreement with Penn Virginia Operating Co., L.L.C., a wholly owned subsidiary of Penn Virginia Resource Partners, L.P.(NYSE: PVR), for the sale of approximately 62,000 fee acres of forestland in West Virginia for $93.1 million. MeadWestvaco expects to complete the transaction in the third quarter of this year."
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This completes the announced planned sales of MWV and leaves the company with about 800,000 acres. Read the entire news release here.
MeadWestvaco appears to have a very well thought through program for the remainder of it's timberland holdings. All lands have been (or will be) classified into one of four categories: Development, Emerging Development, Recreation and Timberland. The resulting implementation plan has three prongs.
- East Edisto: Development already well reported.
- Small Tract Sales: Appears to be the guts of the program. - 117,000 acres along Georgia/Alabama line (Mahrt mill), 95,000 acres in Virginia and West Virginia. SC not yet determined. The SC lands will be determined and a marketing plan for the entire program completed within a year.
- Continuation of Forest Management with select Sales over time. Rough acreages in this program are 150,000 acres in the Rupert WV area, 70,000 acres in the Appomattox, VA area and 320,000 acres currently in SC. The SC number will be reduced by the number of acres selected for the Small Tract Sales program.
Some people in the Charleston area are trying to pressure MWV into selling the East Edisto lands for "conservation" purposes. They continue to propose a price of $4,000 per acre which is way below the market value for that land.
On another note, Carl Icahn has taken a position of almost 3.8 million shares of MWV. It will be interesting to see why, and what he wants to see happen. He's not usually too passive! --Brian
Something is amiss for the MeadWestvaco Shareholders. The Elkins lands, with very little stumpage remaining, were sold at a rock-bottom price to a coal company. Now nobody believes Penn Virginia is about to sit around for 40-60 years to grow sawtimber black cherry. They mine. Obviously there is recoverable coal and gas. Oh, sure 93 million seems like a lot and will make MeadWestvaco's bottom line seem fat this year, but I suspect they forewent long-term profit and shareholder return yet again Tis the story of this company.
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