Packaging Corp offers to buy Boise for $1.28 billion
(Reuters) - Packaging Corp of America said it would acquire smaller rival Boise Inc for about $1.28 billion to boost its container board capacity.
Packaging Corp's offer of $12.55 per share represents a premium of 26 percent to Boise's Friday close.
Boise shares were trading at $12.53 before the bell. Packaging Corp shares jumped 10 percent to $60.03.
Packaging Corp, the fourth-largest maker of containerboard and corrugated packaging products in the United States, said it would assume Boise's $714 million debt.
The deal, expected to add to earnings immediately, will increase Packaging Corp's containerboard capacity by 42 percent to 3.7 million tonnes (1 tonne = 1.102 metric tons).
The company also said the acquisition will boost its presence in the Pacific Northwest.
Packaging Corp was advised by BofA Merrill Lynch while JP Morgan Securities LLC advised Boise.
(Reporting by Rohit T. K. in Bangalore; Editing by Saumyadeb Chakrabarty)