OfficeMax shares soar on expected gain from Boise Cascade IPO
(Reuters) - Shares of U.S. office supplies chain OfficeMax Inc OMX.N rose as much as 29 percent on Friday on expectations the company will benefit from an initial public offering of wood products maker Boise Cascade LLC, in which it holds a 20.4 percent stake.
Boise Cascade filed with U.S. regulators on Thursday to raise up to $200 million in an initial public offering of its common shares.
"(Boise Cascade) hasn't been the most liquid asset for them," Caris & Company analyst Scott Tilghman said.
"Now we'll get a better sense of valuation and we'll also have a more liquid market, in which OfficeMax could sell and get credit from investors for the cash generated from the sale."
OfficeMax sold its paper, forest products and timberland assets to Boise Cascade in 2004, and as part of the deal it invested $175 million in the group.
A gain of about $180 million realized from the sale was deferred as OfficeMax continued to be involved in the operations of the business.
"This gain is expected to be recognized in earnings as the company's investment is reduced," OfficeMax said in a filing with the Securities and Exchange Commission on November6.
OfficeMax shares were up 21 percent at $10.00 in late morning trading on the New York Stock Exchange.
(Reporting by Ranjita Ganesan in Bangalore; Editing by Ted Kerr)
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