Potlatch May Spin Off Pulp

Potlatch Corp., Spokane, Wa., is considering a tax-free spin-off that would create two stand-alone companies. If approved, the changes would take place in the fourth quarter.

One would be a timber real-estate investment trust (REIT) with 1.65 million acres of forestland in Arkansas, Idaho, Minnesota and Wisconsin. Also included are four sawmills in Idaho, Arkansas, Minnesota, and Michigan, and one industrial-grade plywood mill and one particleboard mill in Idaho.

The other would be a pulp-based manufacturing company that would include consumer products facilities in Lewiston, Id.; Las Vegas, Nv., and Elwood, Il., and its pulp and paperboard facilities in Lewiston, Id., and Cypress Bend, Ar.

"lf the board decides to pursue the spin-off of our pulp-based businesses, it would, among other things, enable management to focus more intently on Potlatch's core timber and real estate businesses to drive more predictable cash flows, limit volatility from future earnings, and deliver long-term growth," said Michael Covey, who would remain chairman, president,