PORTLAND, Ore., May 29 /PRNewswire/ -- Willamette Industries (NYSE: WLL)
today announced that it has sent a letter to its shareholders urging them to
re-elect three directors to the Willamette Board at the upcoming June 7 annual
meeting.
The text of the letter follows:
May 28, 2001
Dear Fellow Shareholders:
Our annual meeting of shareholders on June 7 is fast approaching and, as
you know, we are asking you to re-elect three of our directors to the Board.
We Urge You to Vote The Green Proxy Card To Protect The Value Of Your
Investment
The upcoming vote is important to you, the Company and your investment.
We need your vote. Weyerhaeuser, our competitor, has been engaged in a
hostile takeover attempt of your Company and is now asking you to elect three
of its paid nominees to your Company's Board. These paid nominees include two
former Weyerhaeuser employees who we believe are still receiving Weyerhaeuser
pensions.
Do you believe that Weyerhaeuser would have raised their offer to $50 if
these nominees were already on your Board? In Weyerhaeuser's proxy materials
relating to their $48 offer, it says that its three nominees would be:
"expected ... , subject to their fiduciary duties, [to] seek to cause
the Company's Board of Directors to take all such actions as may be
necessary to facilitate the [Weyerhaeuser $48] Offer and the Proposed
Merger."
We interpret this to mean that Weyerhaeuser's nominees were expected,
subject to their fiduciary duties, to have supported a sale at $48. Do you
really believe Weyerhaeuser's paid nominees are looking out for your
interests?
Why Vote For Willamette's Directors?
Because They Have Delivered Superior Value In The Past, And They Are
Committed To Delivering Superior Value In The Future. All three of our
directors who are up for reelection to Willamette's Board are extremely
experienced and knowledgeable about the Company and have helped deliver
superior value for Willamette's shareholders.
-- Willamette has outperformed the forest products industry for the last
decade by most key financial metrics.
-- Our Board is confident that, over time, we will continue to outperform
the industry and can deliver more value to our shareholders than what
Weyerhaeuser has offered.
-- We believe recent investments will increase Willamette's cash flow by
up to $400 million over the next three years -- a 40% increase over
2000 cash flow -- and we don't believe this is fully factored into our
current stock price or Weyerhaeuser's offer. Indeed, Weyerhaeuser
didn't even know about this potential value when it made its $48 offer.
-- The Board has also said that we will consider value-enhancing
transactions -- such as strategic combinations or share buybacks -- at
times that make sense for Willamette's shareholders, not
Weyerhaeuser's.
Why We Have Not Negotiated With Weyerhaeuser.
The simplest answer is that we don't believe -- and have heard nothing in
recent phone calls with Weyerhaeuser to suggest -- that they are willing to
pay you and the rest of our shareholders what we regard as a fair price.
Indeed, Weyerhaeuser told us just before they made their $48 bid, that the
reason they were acting then is because they thought Willamette's share price
was going to increase.
We believe that negotiating on these terms -- and with a company we firmly
believe is acting disingenuously -- would send the wrong signal to our
shareholders, employees and customers.
Why We Have Said Willamette Is Not For Sale.
We reject Weyerhaeuser's contention that we would not sell at any price.
Our board has never said we won't sell, but we won't sell at the price levels
Weyerhaeuser has indicated it is willing to pay.
If our Board receives an offer -- from Weyerhaeuser or anyone else -- that
it believes reflects the full value of Willamette, and it believes that
accepting an offer would be in the best interests of shareholders and other
constituencies, it would be obligated to consider and act on that offer.
Where is Weyerhaeuser's Premium?
-- Stock prices for the relevant Industry Composite(1) of comparable
companies are up 36% and Weyerhaeuser is up 42% since it began its
offer in November 2000.
-- Willamette has outperformed both the Industry Composite and
Weyerhaeuser since then by most key financial metrics, such as
operating margins, cash flows and returns.
-- We believe your shares could have gone up even more in the absence of
Weyerhaeuser's offer, effectively causing their implied "premium" to
vanish.
-- 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. Our current price implies valuation multiples of
7.5x EBITDA and 13.4x 2002 Consensus EPS Estimates, while Industry
Composite medians are 7.5x and 17.4x, respectively.
-- We believe Weyerhaeuser's current offer would be at least 30% accretive
to Weyerhaeuser's cash earnings on a conservative basis -- this is
value that, in our view, rightfully belongs to you.
In continuing to claim that their offer is "compelling" by using our
closing stock price of November 10, 2000, Weyerhaeuser seems to suggest that
Willamette -- arguably the performance leader in the industry since November
-- would have languished while stock prices in the rest of our industry and
Weyerhaeuser have soared:
[The letter sent to shareholders includes here a chart titled "Recent
Sector Price Appreciation Reduces the Implied Premium". 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.]
Weyerhaeuser's paltry raise of 4% in their May 7 offer pales in comparison
to the 42% rise in Weyerhaeuser's own stock price. We believe YOU -- not
Weyerhaeuser -- should receive the value that is rightfully yours.
Weyerhaeuser Has Said In Advertisements That They Are Willing To Pay An
Increased Price -- If They Have Another Offer To Make, Why Don't They
Just Make It?
Because Weyerhaeuser decided to pursue a public, hostile takeover of
Willamette, all contacts between the two companies and the content of
discussions must be disclosed to the public. Weyerhaeuser's chief executive
worked at Willamette for 25 years -- he knows Willamette well and what it is
worth. The recent paltry increase from $48 per share in cash to $50 in cash
was insulting to many investors that we met and heard from and it only
reinforced our view that Weyerhaeuser does not want to pay a fair price for
Willamette. If Weyerhaeuser has more to offer, they should make that offer.
To Weyerhaeuser, we say: Get real or get lost.
We urge you to vote for our nominees in the upcoming proxy contest using
the enclosed GREEN proxy card. Simply complete, sign, date and return the
GREEN proxy card in the accompanying envelope today.
We Ask You To Support Us And Urge You To Protect Your Investment. We Urge
You To Reject Weyerhaeuser's Offer And Their Nominees.
If you have previously signed a gold proxy card sent to you by
Weyerhaeuser, you have every right to change your vote. Just sign, date and
mail the enclosed GREEN proxy card, which will revoke any earlier dated proxy
cards solicited by Weyerhaeuser that 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.
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.
(1) The "Industry Composite" is comprised, on an equal-weighted basis, 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.
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
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