Sends Letter to Weyerhaeuser Board
PORTLAND, Ore., May 9 /PRNewswire/ -- Willamette Industries (NYSE: WLL)
today announced that its Board of Directors has unanimously voted to reject
Weyerhaeuser Company's (NYSE: WY) revised $50 per share offer as inadequate
and not in the best interests of Willamette shareholders. The Board is
strongly recommending that shareholders not tender their shares and withdraw
any shares that they may have previously tendered.
Willamette also announced that its Board sent the following letter to
Weyerhaeuser's Board informing them of its unanimous recommendation:
May 9, 2001
Dear Weyerhaeuser Board Member:
After careful consideration, the Board of Willamette Industries has
unanimously rejected your amended offer to acquire Willamette for $50 per
share, and has recommended that shareholders not tender their shares and
withdraw any shares they may have previously tendered.
As we have said many times, we will not negotiate at what we regard as
bargain basement prices and it is not our strategy to sell the company. Put
simply, we have concluded that your latest offer does not come close to
accurately reflecting the significant value inherent in what we believe is the
premier franchise in the forest products industry.
Our amended 14D-9, filed today with the Securities and Exchange
Commission, details the factors the Board considered in rejecting your offer,
but we feel we must address directly some of the rhetoric contained in your
recent letters.
-- Your comparison of your latest offer with our share price in
November 2000 is disingenuous. Since November 10, the composite of
paper and forest products company stocks (the "Industry Composite"(1)),
which we believe most accurately reflects our business mix, has
appreciated by 28% and Weyerhaeuser has risen 33%. Since that time,
Willamette has outperformed both the Industry Composite and
Weyerhaeuser on most key financial metrics. The strong performance of
industry stock prices since November vindicates our decision to reject
your unsolicited offer at that time and again today.
-- If Willamette were to have simply tracked Weyerhaeuser's stock price
increase since November, we believe Willamette could now be trading at
about $45 on an unaffected basis. This would mean that Weyerhaeuser's
purported "premium", even after your paltry $2 increase, would be just
10%.
-- Based on 2002 IBES estimates, your $50 per share offer values
Willamette at a P/E ratio of 13.7x, a discount to the Industry
Composite median (16.3x) and slightly above Weyerhaeuser's (13.4x).
This suggests an unaffected Willamette trading price that might be
higher than your revised offer, thereby implying that your amended
offer represents a discount or "negative premium."
-- The chart below confirms our view that historically you have only made
offers for Willamette when stock prices are temporarily depressed.
The chart will be available on Willamette's website at http://www.wii.com, or,
for a fax copy, please call Jonas Leddington at Citigate Sard Verbinnen
(212-687-8080).
The fact is your $50 proposal would be highly accretive to Weyerhaeuser.
While your offer might be "compelling" for your shareholders, it denies our
shareholders value that is rightfully theirs.
Finally, in your letter, you reference what you believe to be "in the
interests of all of Willamette's constituencies." It is difficult for us to
imagine how you could have missed the very negative reaction our employees,
communities and customers have expressed to Weyerhaeuser's actions. Indeed,
significant customers have demanded contracts that could terminate in the
event of a hostile takeover. By alienating all of these constituencies you
have underscored just how difficult it would be to successfully integrate our
businesses.
Willamette is as committed as ever to opposing your proposed hostile
takeover for as long as we determine that it is not in the best interests of
our shareholders, even if that requires a multi-year fight.
Our sole responsibility is to do what's right for Willamette's
shareholders and other constituencies and we are determined to fulfill this
mission.
Sincerely,
Winslow H. Buxton Stuart J. Shelk, Jr.
Gerard K. Drummond Robert M. Smelick
Kenneth W. Hergenhan William Swindells
Duane McDougall Michael G. Thorne
G. Joseph Prendergast Benjamin R. Whiteley
Willamette Industries is an integrated forest products company with
105 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.
(1) The "Industry Composite" is comprised of Boise Cascade Corporation,
Georgia-Pacific Group, International Paper Company, Louisiana-Pacific
Corporation, Smurfit-Stone Container Corporation, Temple-Inland, Inc., and
Weyerhaeuser.
Forward-looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Any such forward looking statement made by Willamette with respect to the
Weyerhaeuser tender offer is not entitled to the benefit of the safe harbor
protections of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties and actual
results could differ materially from those projected. Such risks and
uncertainties include, but are not limited to, the effect of general economic
conditions; the level of new housing starts and remodeling activity; the
availability and terms of financing for construction; competitive factors,
including pricing pressures; the cost and availability of wood fiber; the
effect of natural disasters on the Company's timberlands; construction delays;
risk of nonperformance by third parties; and the impact of environmental
regulations and other costs associated with complying with such regulations.
Please refer to Willamette Industries' Securities and Exchange Commission
filings for further information.
SOURCE Willamette Industries
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Related links:
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, both of Willamette
Industries; or Paul Verbinnen, David Reno or Jim Barron of
Citigate Sard Verbinnen, 212-687-8080, for Willamette Industries
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