Plum Creek-Weyerhaeuser Merger Receives Shareholder Nod

The proposed merger between Plum Creek Timber Co. Inc. PCL and Weyerhaeuser Co. WY recently crossed another hurdle. Shareholders of both the timberland giants voted overwhelmingly in favor of the merger.

At a special meeting held for the shareholders of Plum Creek, around 70% of the total shares outstanding went in favor of the merger with Weyerhaeuser. Per the deal, shareholders of Plum Creek will receive 1.6 Weyerhaeuser shares for each share of Plum Creek. The dividend plan for first-quarter 2016 has been designed in such a way that no shareholder of either entity will be paid two dividends or will fail to receive any dividend. On the other hand, shareholders of Weyerhaeuser also voted generously in support of issuing Weyerhaeuser common shares associated with the proposed merger.

Notably, in Nov 2015, Plum Creek and Weyerhaeuser had inked a merger deal. According to the agreement, Plum Creek will merge with and into Weyerhaeuser and the former will continue as the surviving corporation (read more: Plum Creek and Weyerhaeuser to Merge into a Timber Goliath).

Earlier this month, Plum Creek reported fourth-quarter 2015 earnings per share of 19 cents, which included transaction costs of 4 cents per share related to the pending merger with Weyerhaeuser. Excluding the transaction costs, adjusted earnings per share came in at 23 cents, which beat the Zacks Consensus Estimate of 16 cents. However, adjusted earnings per share for the prior-year quarter were 38 cents.

Currently, both Plum Creek and Weyerhaeuser carry a Zacks Rank #5 (Strong Sell).

Investors interested in the REIT industry may consider stocks like Extra Space Storage Inc. EXR and CorEnergy Infrastructure Trust, Inc. CORR. Both these stocks hold a Zacks Rank #2 (Buy).

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