>From The Oregonian, Nov. 13, 2000, p A1
Weyerhaeuser offers $5.3 billion to purchase Willamette Industries
The bid would unite two of the largest Northwest forest products
>From Wire Reports
Weyerhauser Co. is offering $5.3 billion for Willamette Industries
Inc. in a bid to unite two o the largest forest products companies in the
Weyerhaeuser, based in Federal Way, Wash., said today it had written
a letter dated Nov. 6 proposing to buy all of Portland-based Willamette's
outstanding common stock for $48 a share in cash. Willamette also has
total debt of about $1.7 billion.
"We believe that the union of our companies will result in the
premier forest and paper products company and create immediate value for
Willamette shareholders," Weyerhaeuser Chairman and Chief Executive
Steven Rogel wrote in the letter to Willamette CEO Duane McDougall.
Before joinign Weyerhaeuser in 1997, Rogel spent 25 years with
Willamette Industries, working his way from engineer to chief executive
of the company. Four days after the letter was sent, Willamette responded
that its board had failed to endorse the takeover bid at a meeting
In a subsequent letter, sent Sunday, Rogel wrote that he would
interpret Willamette's response as a rejection and pursue other means of
consumating the transaction.
Paper and lumber companies are combining and shuttering some
operations as prices for products such as lumber have dropped 30 percent
in the past year.
Weyerhaeuser said the combination would provide a more balanced
business mix. Willamette has been hurt by falling demand for plywood from
builders. The company also makes corrugated boxes, paper bags, compuater
paper and copy paper.
"A combination of Willamette and Weyerhaeuser will result in a
company with high quality mangaement and assets focused in complementary
products," Rogel wrote in his second letter, addressed to William
Swindells, chairman of Willamette.
Willamette has been in business in Oregon since 1906, when it was
founded as Willamette Valley Lumber Co. in Dallas.
Willamette's board met Thursday, though it hasn't acted on the
proposal, Weyerhaeuser siad. The company's offer of $48 for each share of
Willamette is 38 percent more than Friday's closing price. It would
assume the $1.7 billion in debt.
"We just want to talk to the board," Rogel said in an interview
today with Bloomberg News. "We're a little frustrated that we haven't
been able to get the opportunity to the board."
Shares of Willamette rose $11.31, or 33 percent, to $46.06 in late
morning trading. Weyerhaeuser fell $1.19 to $41.69.
Willamette did not immediately return a call seeking comment.
The Weyerhaeuser proposal represents a substantial premium of about
60 percent to Willamette's average share price for the past 60 days.
Bloomberg News and The Associated Press contributed to this report.
Contributed as a courtesy by
Daniel B. Wheeler
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Before you buy.