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A Fresh Round In The Paper Chase


Inside Wall Street

A FRESH ROUND IN THE PAPER CHASE

New takeover talk keeps bubbling up--even as International Paper announced its $2.7 billion buy of Federal Paper Board on Nov. 5. A new target: Consolidated Papers (CDP), a maker of printing paper and lightweight coated packaging paper, currently at 61 a share. A New York investment banker says the buyout price being bruited about is 90--and the likeliest buyer is Union Camp (UCC).

He thinks Union Camp is eyeballing Consolidated. Melding the operations would create a more efficient and more profitable papermaker, says one analyst.

Union Camp makes mostly packaging paper--uncoated white paper, kraft paper, and linerboard, plus building products and specialty chemicals. Union Camp posted sales of $3.5 billion last year and is expected to do $4.3 billion this year and $4.5 billion next. Consolidated Papers' projected sales for next year are $2.1 billion, up from this year's estimated revenues of $1.6 billion and 1994's $1 billion.

Currently, Consolidated Papers is the owner of 670,000 acres of timberland in the U.S. and Canada, and Union Camp owns or controls 1.6 million acres in the Southeastern U.S. A Union Camp spokesman says: "We are always looking at options to make us grow." While a spokesman at Consolidated says: "No one has approached us."

Insiders at Consolidated hold sizable chunks of the stock: The officers and directors, including Chairman George Mead, own a total of 35% of the shares. Such a situation usually makes it easier to negotiate a buyout.BY GENE G. MARCIAL


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