This could be the first REIT for trees.
In one of the stranger developments of the day (or the week), $9.4 billion (market cap) lumber company Weyerhaeuser (WY) this morning announced it will convert to a real estate investment trust (REIT) in order to increase profitability. The company said it had not yet set a date for the change, though it won’t happen this year, the company said.
CEO Dan Fulton remarked “Our company will be enhanced by the REIT structure.”
109-year-old Weyerhaeuer, which owns 22 million acres of forrest, has been under pressure as the housing crisis has sapped demand for its lumber and engineered wood products.
The company is expected to lose $1.96 per share this year, up from last year’s $1.21, excluding some costs, and is servicing $5.5 billion of long-term debt.
The conversion to a REIT will result in a special dividend of undistributed profits, the company said, most of it in the form of st ock thanks to IRS rules last declared last year allowing almost all of a dividend in the form of stock.
The company expects those profits to total $6 billion, it said.
Weyerhaeuser shares today are up $2.02, or 5%, at $44.51.