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 NEW YORK, Dec. 8 /PRNewswire/ -- ITT Corporation (NYSE: ITT) announced today plans to spin off ITT Rayonier Inc., the company's wholly owned forest products subsidiary to ITT shareholders. The transaction is one of the largest of its kind.
 The new company will change its name from ITT Rayonier to Rayonier Inc. and will apply for listing on the New York Stock Exchange.
 The ITT Board of Directors approved a management plan to distribute, as a special dividend, all the shares of common stock of ITT Rayonier to holders of ITT Common Stock and holders of ITT Cumulative Preferred stock, $2.25 Convertible Series N, on the basis of one share of Rayonier common stock for every four shares of ITT Common Stock and one share of Rayonier common stock for every 3.1595 shares of ITT Series N. As a result of the transaction, there will be approximately 30 million shares of the new company outstanding.
 The distribution is subject to the final determination of the record and distribution dates by a special committee of the Board following completion of review by the Securities and Exchange Commission. ITT expects that the record date will be in mid-February 1994. The distribution is anticipated to be completed prior to the end of that month.
 "We believe that the distribution of Rayonier shares will serve the business interests of both ITT and Rayonier," Rand V. Araskog, ITT chairman, president and chief executive said. "After detailed analysis that included senior Rayonier management, we concluded that Rayonier's financial and operational profile and capital expenditure requirements could best be served by an independent publicly traded company," Mr. Araskog continued. "This action is demonstrative of and in keeping with ITT's overall financial flexibility," the ITT chairman said.
 "Furthermore, this transaction is another step toward our goals of further increasing shareholder value and, at the same time, simplifying the corporation," Mr. Araskog said.
 Rayonier is a leading forest products company engaged in the production and sale of timber and wood products and specialty pulps. Rayonier was founded in 1926 and operated independently until it became a subsidiary of ITT in 1968. With markets in over 60 countries, over half of Rayonier's approximately $1 billion in sales are derived from exports. Rayonier today owns, or otherwise controls, approximately 1.5 million acres of timber resources in the United States and New Zealand and operates three pulp mills and two lumber mills in the U.S.
 "In the 25 years Rayonier has been part of ITT, the company has prospered and expanded its timber holdings and international presence," said Mr. Araskog. "However, times change and now we believe that as a separate publicly traded company, Rayonier will be in a better position to carry out long-term strategies and objectives exclusively geared to its industry," Mr. Araskog said. "This gives it the opportunity to manage according to Rayonier's unique financial and operating characteristics and allows it the expanded ability to source capital requirements," Mr. Araskog concluded.
 ITT said the company expects to receive a legal opinion that for federal income tax purposes the distribution will be tax-free under the Internal Revenue code. No gain or loss will be recognized by ITT, or by ITT stockholders, upon the distribution.
 ITT stockholders on the record date will not be required to make any payment or to take any other action to receive their Rayonier stock upon the distribution. The distribution rate for the ITT Series N Preferred was determined by its conversion rate which is 1.2660 shares of common stock for each Series N share.
 After the distribution, ITT will have no ownership interest in Rayonier, and Rayonier will be an independent public corporation with its own board of directors. ITT and Rayonier will enter into certain agreements governing their relationship after the istribution.
 Rayonier Timberlands L.P. (trading on the NYSE under symbol LOG), a master limited partnership that grows and sells timber in the Southeast and Northwest United States and an affiliate company of Rayonier, Inc., will not be affected by this transaction.
 The Board of Directors of ITT has reserved the right to amend, modify or abandon the distribution at any time prior to the distribution.
 ITT Corporation is a diversified, global enterprise made up of ITT Business and Financial Services, ITT manufacturing, ITT Sheraton and ITT Rayonier. The company had 1992 sales of $21.7 billion, with some 106,000 employees in 63 countries around the world.
 -0- 12/8/93
 /CONTACT: Jim Gallagher of ITT, 212-258-1261/

CO: ITT Corporation; ITT Rayonier Inc. ST: New York IN: PAP SU: DIV

LG -- NY014 -- 1610 12/08/93 08:38 EST
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Publication:PR Newswire
Date:Dec 8, 1993

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