Sign in Subscribe
Real estate industry

Potlatch Corporation Approves Final Steps for REIT Conversion

Strategic Insights

— 1 min read

Potlatch Corporation's Board of Directors has given the green light for the company to begin operating as a real estate investment trust (REIT) on January 1, 2006. This conversion is a significant step towards increasing the company's ability to invest in timberland assets and raise capital through equity offerings. As part of the conversion, Potlatch will increase its authorized shares from 40 million to 100 million, providing a buffer for future stock splits, equity offerings, and acquisitions.

Key Takeaways:

  • The company's REIT conversion is expected to take effect on January 1, 2006, following the approval of the final steps by the Board of Directors.
  • The authorized shares will be increased to 100 million from the current 40 million, providing flexibility for future stock splits, equity offerings, and acquisitions.
  • Stockholders will have the opportunity to elect to receive a special taxable distribution of accumulated earnings and profits (E&P) in the form of cash, stock, or a combination of both.
  • The company expects to pay its first regular quarterly distribution as a REIT in February 2006, with a distribution amount of $0.65 per share based on the current number of shares outstanding.
  • Potlatch is a diversified forest products company with 1.5 million acres of timberlands in four states: Arkansas, Idaho, Minnesota, and Oregon.
  • The company expects to pay a special E&P distribution of between $440 and $480 million in cash, stock, or a combination of both, with an aggregate cash payment capped at 20 percent.

Statistics:

  • 1.5 million acres of timberlands in four states: Arkansas, Idaho, Minnesota, and Oregon.
  • 40 million authorized shares (current)
  • 100 million authorized shares (post-REIT conversion)
  • $0.65 per share distribution amount (first regular quarterly distribution)
  • $0.65 per share annually distribution amount (expected)
  • $440 - $480 million special E&P distribution (expected)
  • 20% cap on aggregate cash payment for special E&P distribution
  • First regular quarterly distribution expected in February 2006
  • Special E&P distribution expected in the first quarter of 2006

Sources:

  • Potlatch Corporation's press release dated (no date mentioned in the original text)
  • Company website: www.potlatchcorp.com
  • SEC filings: Potlatch Holdings, Inc. Form S-4, filed September 19, 2005; Potlatch Corporation's proxy statement, filed as part of the REIT conversion process.

Read more