NEW YORK (AP) -- Packaging and building materials maker Temple-Inland says its board has adopted a shareholder rights plan to thwart a hostile takeover by larger rival International Paper Co.
Austin, Texas-based Temple-Inland on Monday rejected a $3.3 billion unsolicited bid from Memphis-based I-P, saying the offer is too low and would face heavy regulatory scrutiny.
The bid works out to $30.60 per share, representing a premium of about 45 percent over Temple-Inland's closing stock price on Monday.
Temple Inland shares soared $8.56, or 41 percent, to $29.57 in morning trading Tuesday.
A shareholder rights plan, or "poison pill," gives shareholders the rights to buy new shares that will dilute the value of existing stock if a hostile buyout is attempted. Under Temple-Inland's plan, the rights will be exercisable only if a person or group acquires 10 percent or more of its common stock.
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