IRVINE, CA—The board of directors of Weyerhaeuser Co. is intending to distribute via a split-off transaction all of the issued and outstanding shares of Weyerhaeuser Real Estate Co., an indirect wholly owned subsidiary of Weyerhaeuser. The split-off is in connection with the “Reverse Morris Trust” transaction in which a wholly owned subsidiary of TRI Pointe Homes Inc. will merge with and into WRECO, with WRECO surviving the merger and becoming a wholly owned subsidiary of TRI Pointe, as GlobeSt.com reported in November 2013.
Also, as GlobeSt.com reported earlier this week, TRI Pointe Homes said in a Q1 earnings report that the merger is on target to close early in the third quarter of the year. The acquisition will establish TRI Pointe as one of the 10 largest homebuilders in the US based on estimated combined equity market value.
The exchange is expected to be tax-free to participating Weyerhaeuser shareholders for US federal income-tax purposes. The commencement of the exchange offer will be announced at a later date, at which time the full terms of such exchange will be disclosed, according to Weyerhaeuser.
In the split-off transaction, Weyerhaeuser shareholders will have the option to exchange some or all of their Weyerhaeuser common shares for WRECO common shares, which will immediately be converted into the right to receive shares of TRI Pointe common stock upon the consummation of the transaction. As a result of the exchange offer, the number of Weyerhaeuser’s outstanding shares will be reduced.
All of the 100 million issued and outstanding WRECO common shares—which will be converted into the right to receive 129.7 million newly issued shares of TRI Pointe common stock—will be offered in exchange for Weyerhaeuser common shares in the offer, subject to adjustments in certain circumstances. The exchange offer will be subject to proration if the offer is oversubscribed, and the number of shares Weyerhaeuser accepts in the exchange offer may be less than the number of shares tendered. If the exchange offer is consummated, but not fully subscribed, then the additional WRECO common shares owned by Weyerhaeuser will be distributed as a pro rata dividend to Weyerhaeuser shareholders.