Weyerhaeuser Co., the second-largest owner of U.S. timberland, declared a record $5.6 billion special dividend to lock in the company's conversion this year to a real estate investment trust. The shares rose the most in 15 months.

The company is making the payout to signal its determination to convert to a REIT this year and address investor concern that its shrinking market valuation could have derailed the process, Chief Executive Officer Daniel Fulton said in an interview. The dividend, limited to 10 percent cash with the balance in stock, will be paid Sept. 1, the Federal Way, Washington-based company said today.

"Market conditions today are not impacting our ability to convert and we wanted to take away the uncertainty and provide the surety for our shareholders that we will complete the conversion this year," Fulton, 61, said by phone.

Weyerhaeuser had seen its shares in New York tumble by a third since their peak this year on April 23 as investors reacted to the Greek financial crisis and concern the U.S. may slide back into recession. Some shareholders, including Franklin Mutual Advisers LLC, have pressured the company to become a REIT to reduce taxes on earnings from its more than six million acres of timberlands. "We have the intent of converting this year," Fulton said.

Eoin Treacy's view Lumber prices fell precipitously from their April high but lost momentum from late June and found support above $180. Prices have since rallied back above $200 and a sustained move back below that level would be required to question scope for some further higher to lateral ranging.

Weyerhaeuser, West Fraser Timber and Sino Forest pulled back sharply in sympathy with the lumber price and have found at least short-term support over the last few weeks. All three are testing their overhead 200-day moving averages and will need to sustain moves above them if the current rally is to gain traction.

Elsewhere in the sector Plum Creek also pulled back sharply though not as deeply as the above shares. Rayonier encountered resistance near its 2008 highs in April but found support in the region of the 200-day MA and a sustained move below $43 would be required to question scope for further upside. Potlatch has a relatively similar pattern.