Reiterates Inadequacy of Weyerhaeuser Offer and Strongly Urges Willamette
Shareholders Not to Support Weyerhaeuser's Paid Nominees
PORTLAND, Ore., Feb. 22 /PRNewswire/ -- Willamette Industries (NYSE: WLL)
today announced that its Board of Directors has sent a letter to
Weyerhaeuser's Board of Directors expressing its strong commitment to
resisting Weyerhaeuser's hostile takeover attempt. The Willamette Board has
also sent a letter to its own shareholders, setting out the reasons why
Willamette's board continues to believe that Weyerhaeuser's offer is
inadequate and advising shareholders not to return Weyerhaeuser's proxy card.
The texts of both letters follow:
Dear Weyerhaeuser Board Member:
We write to express our disappointment that Weyerhaeuser has chosen to
continue to pursue its attempted hostile acquisition of Willamette. By now,
you must know that we are firmly committed to resisting your attempt to coerce
our shareholders with a low-ball offer.
While we assume you share your management's views on this proposed
transaction, you should understand that continued extensions of your hostile
tender offer and threatened proxy contest will not change our resolve.
Weyerhaeuser has said absolutely nothing new over the past three months, and
their repeated calls to "negotiate" in this context are at best disingenuous,
and at worst illogical. We are committed to protecting the interests of all
of our shareholders, and have no personal agenda other than to enhance the
value of the Company.
Although Willamette is not for sale, we understand and take very seriously
our fiduciary obligations and are willing to listen to any serious, legitimate
proposal that may benefit our shareholders. As we have said many times, your
offer grossly undervalues the premier franchise in the forest products
industry. In fact, since we rejected your offer in November, a relevant
composite of forest product company stocks has appreciated by an average of
approximately 16 percent, making your offer of $48 even more unappealing. Our
company is performing well and we remain confident that we can deliver greater
value to our shareholders over the long term.
You should know that Weyerhaeuser's antagonistic approach has needlessly
alienated many of our employees, customers and members of the communities in
which we operate. This growing alienation only further highlights our
cultural differences and raises very serious questions about how successfully
our two companies could ever be integrated. Indeed, the questions are now so
serious that many observers believe Weyerhaeuser would be better off, and far
more successful, trying to buy other companies that might be receptive to your
proposals.
In conclusion, let us say once again that -- whatever you may have been
told -- we are committed to our future and are prepared to fight this battle
for as long as necessary to best protect the interests of our shareholders and
other constituencies. We are extremely confident in our position. For the
good of both companies, we urge you to withdraw your offer.
Sincerely, the Willamette Board of Directors
/signed/
Dear Fellow Shareholder,
As part of the ongoing efforts by Weyerhaeuser Company to take control of
your company, you may already have received proxy materials from them
soliciting your vote to elect their paid nominees to Willamette's board at our
2001 annual meeting. We have yet to set a date for our meeting, but we
believe Weyerhaeuser is trying to confuse some shareholders into voting early
without the benefit of receiving important information from Willamette. If
you receive a proxy card from Weyerhaeuser, there is no reason or legal
requirement to return it.
YOUR BOARD STRONGLY URGES YOU NOT TO RETURN YOUR PROXY CARD SUPPORTING
WEYERHAEUSER'S NOMINEES BECAUSE:
-- No action on your part is necessary at this time. We will set an
annual meeting date shortly and distribute information materials well
in advance of that meeting so that you can make an informed decision.
-- Weyerhaeuser is trying to steal Willamette for far less than it is
worth. Don't let them do it. Your board has determined that
Weyerhaeuser's hostile offer is inadequate and that it seriously
undervalues your company.
-- Since we rejected Weyerhaeuser's offer in November, a relevant
composite of forest product company stocks has appreciated by
approximately 16 percent, driven in part by stronger long-term
fundamentals. This supports our view then and now that Weyerhaeuser's
offer was an opportunistic attempt to acquire Willamette at a time when
industry share prices were depressed.
INDUSTRY STOCK PRICES HAVE RALLIED
[For full graph please call 212-687-8080, or access the press release at
http://www.wii.com]
-- This rise in industry stock prices suggests that, even without
Weyerhaeuser's offer, Willamette would be trading significantly higher
today, thereby reducing the premium on Weyerhaeuser's offer. At this
level, Weyerhaeuser's offer would imply a significantly lower premium
than has been paid in other transactions involving forest product
companies that have not performed nearly as well as Willamette.
Weyerhaeuser's proposal values Willamette at a 1 percent discount to
its 52-week high and a 6 percent discount to its all time high, unlike
other deals in which the target received a premium to these benchmarks.
-- The Board has received the opinion of Goldman, Sachs & Co., financial
advisor to the Company, that as of December 11, 2000, the Offer Price
is inadequate, from a financial point of view, to the Company's
shareholders.
-- You have to question whether Weyerhaeuser's paid nominees can fairly
evaluate what's in your best interests. Each of the Weyerhaeuser
nominees is being paid $25,000 by Weyerhaeuser to stand for election
and three of them are still drawing Weyerhaeuser pensions. At a
minimum, we believe they have a serious conflict of interest in trying
to decide what is right for you as a Willamette shareholder, versus
what is right for Weyerhaeuser and its shareholders. In addition,
three of their four nominees have no public company board experience at
all.
-- While we have said that we are not for sale, we understand and take
very seriously our fiduciary obligations and are willing to listen to
any serious, legitimate proposal that may benefit our shareholders.
While Weyerhaeuser says it just wants to negotiate, we say we have
spoken to them numerous times and they have said nothing new in the
last three months.
-- Over the last decade, Willamette has significantly outperformed the
paper industry, the only company in the industry to deliver to its
shareholders a return almost equal to the S&P and we are positioned to
continue doing so. Indeed, we are committed to delivering value and
expect in the next few years that our shareholder returns will continue
to exceed our peers.
SUPERIOR PRICE PERFORMANCE
[For full graph please call 212-687-8080, or access the press release at
http://www.wii.com]
-- Willamette's board believes it can achieve for you greater value over
the longer term than Weyerhaeuser's offer. Willamette is committed to
building on its strong track record of delivering shareholder value.
Over the last three years, Willamette has made a number of key
strategic investments aimed at seizing market opportunities and further
improving already strong earnings growth. You should benefit from this
upside potential of these initiatives, not Weyerhaeuser.
VALUE ENHANCING INITIATIVES UNDERWAY
[For full graph please call 212-687-8080, or access the press release at
http://www.wii.com]
-- Willamette's industry leadership again showed in our strong financial
performance in 2000.
-- Our return on average assets for the year 2000 was more than double the
industry average.
-- Our return on average equity was 15 percent, again outpacing our
competitors.
-- EBITDA (earnings before interest, taxes, depreciation and amortization)
of $949 million was 20.4 percent of sales, significantly higher than
the rest of the industry.
-- Our return on capital for 2000 was 12 percent, exceeding our cost of
capital. In addition, our sales, general and administrative costs as a
percentage of sales for 2000 were 5.8 percent, below the 5.9 percent of
the previous year, and clearly one of the lowest in the industry.
-- Earnings for the fourth quarter were strong considering the significant
challenges of current environment, including economic slowdown, rising
energy costs and weakening industry conditions.
Don't let Weyerhaeuser steal your company. Because of the confusion that
Weyerhaeuser's premature mailing is attempting to cause, we have arranged for
MacKenzie Partners, Inc. to be available to respond to any questions or
concerns you may have, and we encourage you to call MacKenzie toll-free at
800-322-2885 or collect at 212-929 5500.
In the near future, you will be receiving our 2000 Annual Report, which
describes your Company's accomplishments during the past year and plans for
the future. We, the other members of your board and our management continue
to be committed to protecting and enhancing the value of your Willamette
investment. Thank you for your continuing support.
On behalf of the Board of Directors,
Yours Sincerely,
Duane C. McDougall William Swindells
President and CEO Chairman
/signed/ /signed/
Willamette Industries is an integrated forest products company with
107 plants, located in the U.S., France, Ireland and Mexico. The company owns
1.7 million acres of forestland in the U.S. and manages it sustainably to
produce building materials, composite wood panels, fine paper, office paper
products, corrugated packaging and grocery bags.
Investors are urged to read the proxy statement that will be filed by
Willamette in connection with the 2001 annual meeting of shareholders when it
becomes available, as well as any solicitation/recommendation statement that
has been or may be filed by Willamette, because they contain important
information. Each of these documents has been or will be filed with the SEC
and investors may obtain a free copy of them at the SEC's Internet web site at
http://www.sec.gov. These documents may also be obtained for free (when available)
from Willamette by directing such request to: Willamette Industries, Inc.,
Attention: Investor Relations, 1300 S.W. Fifth Avenue, Suite 3800,
Portland, Oregon 97201, telephone: 503-227-5581, or MacKenzie Partners, Inc.
at 800-322-2885 (toll-free) or at 212-929-5500 (collect) or by e-mail at
proxy@mackenziepartners.com. Detailed information regarding the names,
affiliations and interests of individuals who may be deemed participants in
the solicitation of proxies of Willamette's shareholders is available in the
Soliciting Materials on Schedule 14A filed by Willamette with the SEC on
January 3, 2001.
SOURCE Willamette Industries
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http://www.wii.com
Company News On-Call:
http://www.prnewswire.com/comp/971763.html or fax,
800-758-5804, ext. 971763
CONTACT:
Greg Hawley, EVP & CFO, 503-273-5640, or
Cathy Dunn, VP Communications, 503-273-5642, all of Willamette
Industries; or Paul Verbinnen, or David Reno, or Jim Barron, all
of Citigate Sard Verbinnen, 212-687-8080, for of Willamette
Industries
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