Paper War Rages On
Two paper giants from the Northwest have been sparring. One wants to take over the other. Now shareholders have weighed in.
by ERIK CAGLE
The high-octane, acrimonious hostile takeover attempt of paper giant Willamette by fellow industry leader Weyerhaeuser appears far from over.
Battle lines were drawn June 7, when Willamette shareholders appeared to have voted Weyerhaeuser's three candidates onto Willamette's nine-member board of directors. Official results weren't expected for a few weeks, as of press time.
With its representatives in place, Weyerhaeuser vows to nominate another slate of directors for election at the 2002 annual meeting should Portland, Ore.-based Willamette continue refusing to negotiate.
Willamette counters that the current offer of $50 per share (roughly $5.5 billion) is not even "in the ballpark."
Though Willamette management feels the vote was too close to call, William Swindells, chairman and grandson of Willamette's founder, acknowledged: "Today's result indicates that a large number of our shareholders desire the board to consider some form of value-enhancing transaction."
The two companies are longstanding rivals. Steven Rogel, Weyerhaeuser chairman and CEO, left Willamette at the end of 1997, after 25 years there, to take over Weyerhaeuser. He has been attempting to purchase his former company ever since.
Should Federal Way, Wash.-based Weyerhaeuser prevail in its takeover attempt, it would create the second largest forest products company, behind only International Paper.
A Battle Of Words
The two sides engaged in a propaganda letter-writing campaign leading up to the June 7 board meeting. On May 9, Willamette informed Weyerhaeuser that its board of directors had unanimously rejected its amended offer of $50 per share. Willamette called the offer's 4 percent increase from $48 "paltry."
On May 21, Weyerhaeuser said it might up the ante to bring Willamette to the negotiating table.
"If Willamette is prepared to negotiate a definitive merger agreement promptly, Weyerhaeuser is willing to increase its offer to above $50 a share," Rogel said in a statement.