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Georgia-Pacific sheds unit
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September 17, 1997: 6:47 p.m. ET
New company to be third-largest timberland owner in North America
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NEW YORK (CNNfn) - Georgia-Pacific Corp., the nation's second-largest pulp and paper company, said Wednesday its board has approved the separation of its timber business.
The company's new timber group will be the third-largest private timberland owner in North America with 5.8 million acres in the U.S. and Canada, the Atlanta-based company said in a statement.
"It unlocks the value of our tremendous timber and land resources, but does not alter our fundamental operating and financial strategy," said Alston D. Correll, Georgia's chairman and chief executive.
In its statement, the company said the restructuring will not result in the distribution, spinoff or sale of any assets or liabilities or in the creation of a new corporate structure. Only the equity structure of the company will change.
Investors applauded the decision, sending the stock (GP) up 4-1/16 to close at 98-5/8 on the New York Stock Exchange.
The transaction is structured as a dividend of one share of the newly created stock distributed to holders of each share of Georgia-Pacific.
The current annual cash dividend of $2 is expected to remain unchanged with the payment of $1 per share for each class of stock.
Georgia-Pacific said it will apply to list both classes of common stock on the New York Stock Exchange.
The transaction, which is anticipated to be tax free to both the company and its shareholders, will be submitted to shareholders for approval at a special meeting expected to be held in December.
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Georgia-Pacific
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