Letter Argues Decision to Reject Offer as 'Inadequate' Vindicated
PORTLAND, Ore., May 14 /PRNewswire/ -- Willamette Industries (NYSE: WLL)
today announced that it has sent a letter to its shareholders arguing that
Weyerhaeuser Company's (NYSE: WY) revised tender offer is inadequate and not
in the best interests of shareholders. The letter urges shareholders to elect
Willamette's Board nominees at the upcoming June 7 annual meeting.
The text of the letter follows:
May 11, 2001
Dear Fellow Shareholders:
On May 8, 2001, the Board of Willamette rejected Weyerhaeuser's amended
offer to acquire your company for $50 per share because we believe it
dramatically undervalues Willamette's premier franchise and would deny you
value that is rightfully yours.
WHY SHOULD YOU BELIEVE WEYERHAEUSER'S SELF-SERVING RHETORIC? DON'T LET
THEM ACQUIRE YOUR COMPANY FOR LESS THAN IT'S WORTH.
IS WEYERHAEUSER REALLY OFFERING YOU ANY PREMIUM FOR YOUR SHARES? WE
BELIEVE WILLAMETTE COULD BE TRADING TODAY AT $45-$50 PER SHARE, EVEN WITHOUT
WEYERHAEUSER'S LATEST OFFER.
Our reasons are clear and straightforward:
The Industry Composite(1) is up 28% and Weyerhaeuser is up 33% since it
began its offer in November 2000:
-- Since Willamette has outperformed both the Industry Composite and
Weyerhaeuser since November 2000 by most key financial metrics, such as
operating margins, cash flows and returns, we believe your shares could
have gone up even more than 28% or 33% in the absence of their offer to
approximately $45, reducing their implied "premium" to approximately
10% -- hardly compelling.
-- Furthermore, based upon current valuation multiples (both Price to
Earnings and Enterprise Value to EBITDA) for the industry, we believe
your shares could even be trading above $50 today in the absence of
Weyerhaeuser's hostile offer.
DON'T BELIEVE WEYERHAEUSER WHEN THEY SAY THEIR OFFER IS 'COMPELLING',
BECAUSE:
-- We believe that, based on recent Wall Street (IBES) EPS estimates and
other reasonable assumptions, Weyerhaeuser's offer would result in
accretion of approximately 30% on a cash basis to its 2002 cash EPS
-- a compelling value for Weyerhaeuser shareholders. Willamette's
shareholders would receive none of this upside.
-- Weyerhaeuser's paltry increase of only $2 per share does nothing to
change our minds, as we believe that we can deliver more value to you
over the long-term.
-- Rising industry stock prices have vindicated our decision not to accept
Weyerhaeuser's offer.
-- Remember, Weyerhaeuser's incentive is to pay as little as possible for
your Company.
IT APPEARS THAT WEYERHAEUSER IS OPPORTUNISTICALLY TRYING TO ACQUIRE YOUR
COMPANY -- THEY HAVE CONSISTENTLY MADE OFFERS WHEN INDUSTRY STOCK PRICES ARE
DEPRESSED.
[The letter sent to shareholders includes here a chart titled
"Weyerhaeuser's Low-ball Offers." The chart will be available on Willamette's
website at http://www.wii.com, or, for a fax copy, please call Jonas Leddington at
212-687-8080.]
WE BELIEVE WEYERHAEUSER'S AMENDED OFFER DRAMATICALLY UNDERVALUES YOUR
COMPANY.
We ask you to consider the following facts:
-- Your board and management have delivered for you an average annual
return (including re-invested dividends) on Willamette's common stock
of nearly four times that of the Industry Composite over the period
1991 through November 10, 2000.
-- Willamette has historically led the industry in most key financial
metrics and the Board believes that Willamette is well positioned to
continue this outperformance as an independent company.
-- The premiums and multiples implied by the revised offer are well below
those paid in recent comparable industry transactions.
-- We have traded above $50 per share in the past.
-- Willamette has undertaken significant value enhancing initiatives over
the last few years that are expected to increase annual EBITDA by
$300 - $400 million, or approximately 30 - 40%. Weyerhaeuser's offer
incorporates none of this value.
-- The Board has received the opinion of Goldman, Sachs & Co., financial
advisor to the Company, that, as of May 8, 2001, the revised offer
price is inadequate, from a financial point of view, to the Company's
shareholders.
-- Weyerhaeuser's $50 proposal would be highly accretive to Weyerhaeuser,
suggesting that Weyerhaeuser's shareholders would receive substantial
value that is rightfully yours.
DON'T FORGET WEYERHAEUSER'S NOMINEES HAVE STRONG TIES TO WEYERHAEUSER.
We urge you to reject Weyerhaeuser's offer and their three nominees.
Remember these nominees have:
-- No public company director experience at all;
-- Each been paid $25,000 just to stand for election, and we believe two
of them are receiving Weyerhaeuser pensions;
-- Indicated their intention, subject to their fiduciary duties, to
support the sale of your company to Weyerhaeuser at the previous offer
price of $48 per share.
In contrast, Willamette's nominees:
-- Have been collectively associated with the company and its successful
record of building shareholder value as directors, executive officers,
employees or outside advisors for over 70 years;
-- Are intimately familiar with the company and are committed to
delivering superior value to Willamette's shareholders -- not to
Weyerhaeuser's shareholders.
YOUR BOARD HAS DETERMINED THAT THIS IS AN INADEQUATE HOSTILE OFFER.
WE URGE YOU TO STOP WEYERHAEUSER BY VOTING YOUR GREEN PROXY CARD TODAY.
We urge you to vote for our nominees in the upcoming proxy contest using
the enclosed GREEN proxy card. The Board strongly recommends that you
complete, sign, date and return the GREEN proxy card in the accompanying
envelope promptly.
If you have previously signed a gold proxy card sent to you by
Weyerhaeuser, you have every right to change your vote. Simply sign, date and
mail the enclosed GREEN proxy card, which will revoke any earlier dated proxy
cards solicited by Weyerhaeuser which you may have signed.
Thank you for your continued support.
On Behalf of Your Board of Directors
Sincerely,
Duane C. McDougall William Swindells
Chief Executive Officer Chairman of the Board
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. The Willamette Board believes the companies included in the
"Industry Composite" are most representative of Willamette's business mix.
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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