Weyerhaeuser plans to distribute $5.6 billion to shareholders through a special dividend, the company said Monday, a required step in Weyerhaeuser's path to becoming a real estate investment trust.
Company shares jumped more than 8 percent, or $3.04, to $38.88 before the market opened.
Weyerhaeuser, one of the world's largest lumber and wood products companies, has been pressured by investors for years to lower its income tax rate, about 35 percent, by becoming a REIT.
The investment trusts distribute at least 90 percent of their taxable income to shareholders as dividends each year, and then can deduct those dividends from corporate taxable income. REITS often pay no corporate taxes.
The payout, expected on Sept. 1, includes the regular quarterly dividend of approximately $11 million. It will be paid to shareholders as of July 22.
Most of the payout will be in the form of stock. Cash payments are limited to 10 percent of the payout, or $560 million.
The company had about 211.6 million shares outstanding as of April 30.
Weyerhaeuser's board approved its conversion into a REIT in December. Its shareholders approved the change in April.
A company makes a REIT proposal when it files the tax return for the effective year. Weyerhaeuser, based in Federal Way, Wash., plans to officially apply to become a REIT when it files its 2010 tax return in 2011. The status would be effective beginning Jan. 1, 2010.
Weyerhaeuser joins fellow forestry REITs Potlatch, Rayonier Inc. and Plum Creek Timber Co.
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