The Shareholder Forum

supporting investor interests in long term enterprise value

 

Purpose & History of Services

The Shareholder Forum

The Shareholder Forum supports investor interests in corporate enterprise value with services that require independence – and that may benefit from the Forum’s network resources and recognition for advocacy of long term investor interests – to assure a definition of relevant issues and fair access to information that can be relied upon by both corporate and investor decision-makers.

The policies that provide a foundation for the Forum’s marketplace functions have been carefully developed and tested to allow any investor to participate in its communications, either anonymously or visibly, without acting in concert. Established originally to accommodate professional fund managers, this independent moderator function has proved to be consistently effective in managing orderly processes of issue definition for rational analysis by fiduciaries who are responsible for informed decisions.

Initiated in 1999 by the New York Society of Security Analysts with lead investor and former corporate investment banker Gary Lutin as guest chairman to address the professional interests of its members, and independently supported by Mr. Lutin since 2001, Forum programs have achieved wide recognition for their effective definition of important issues and orderly exchange of the information and views needed to resolve them. The Forum's ability to convene all key decision-making constituencies and influence leaders has been applied to subjects ranging from corporate control contests to the establishment of consensus marketplace standards for fair disclosure, and has been relied upon by virtually every major U.S. fund manager and the many other investors who have participated in programs that addressed their interests.

Currently important applications of the Forum’s independent position include the support of corporate managers who wish to provide the leadership expected of them by responding to activist challenges with orderly reviews of issues relevant to long term investor interests.

Requests for Shareholder Forum consideration of support may be initiated confidentially by any investor or by the subject company, or by the professional advisors to either.

 

Forum Report: Letter Inviting Willamette Cooperation with Shareholder Forum

(May 14, 2001)

From: Gary Lutin
To: Distribution: Willamette Shareholders
Sent: Tuesday, May 15, 2001 1:15 AM
Subject: Letter inviting Willamette cooperation with shareholder Forum

 
Copied below is the text of a letter sent this afternoon to William Swindells, chairman of Willamette's board of directors.  In it, I summarize the issues which appear to be relevant to shareholder realization of the $1 billion value enhancement opportunity associated with Weyerhaeuser's bid, and invite management's cooperation with our planned shareholders Forum and its definition of terms for a "Model Merger."
 
Please let me know if you have any comments or suggestions.
 
                GL - 5/14/01
 

Text of 5/14/01 letter to William Swindells
 
 
[Letterhead]
LUTIN & COMPANY
575 MADISON AVENUE, 10th FLOOR
Telephone (212) 605-0335
Facsimile (212) 605-0325
 
May 14, 2001
 
By telecopier: 503/273-5604
 
Mr. William Swindells
Chairman, Board of Directors
Willamette Industries, Inc.
1300 Southwest Fifth Avenue, Suite 3800
Portland, Oregon  97201
 
Dear Mr. Swindells:
 
    As indicated in my May 7th telephone message, several large investors have encouraged my attention to the interests of Willamette shareholders.
 
    Mr. McDougall's response to my inquiry was disappointing.  Essentially confirming the concerns expressed by many investors, he told me that your board did not want to be informed of alternatives to the recommendations of your existing advisers regarding the Weyerhaeuser opportunity, and that you did not wish either to learn more about the views of shareholders or to provide shareholders with more information about management's policies.
 
    It is my belief that an informed, orderly resolution of the differences among management and shareholders will be critical to your realization of an apparent $1 billion value enhancement opportunity, based on the following observations:
  • Many industry experts believe that a combination of Willamette and Weyerhaeuser would have unique strategic benefits, especially in the context of global competition.  There has been no definition of any alternative strategy which presents comparable opportunities and risk reduction for Willamette's shareholders, or for Willamette's other stakeholders.
  • The proposed Weyerhaeuser combination offers Willamette shareholders an opportunity for realization of additional value in the range of $10 per share.  Although estimates vary widely, nearly all valuations of Willamette support a price range at least 10% above Weyerhaeuser's recent $50 per share offer.  If Weyerhaeuser is following conventional practices under the guidance of professionally experienced advisers, it can be reasonably assumed that they would not be bidding more than 80-90% of their limit at this stage of a contest involving an unresponsive target and no visible competitor.
  • The current defensive position of Willamette management could obstruct a combination with Weyerhaeuser.  It will in any event preclude the kind of cooperative exploration that, particularly in the absence of an actively competitive bidding environment, would normally permit the negotiation of conditions to increase shareholder value realization by 5-15% above the non-cooperative bid limit.
  • Reports of personal attitudes as well as actions encourage speculation that Willamette's management may be biased against a combination with Weyerhaeuser.  For example, the terms on which Willamette engaged Goldman Sachs -- providing for a fee equal to 0.40% of value if there is a transaction but an alternative payment of $30 million if there is no transaction by September 1, 2001 -- create a significant financial incentive for the adviser to prevent or at least delay a combination.
  • Willamette's current management policy allows shareholders to express their support of a Weyerhaeuser combination only in the form of protest gestures, with potentially destructive results.  Reportedly, shareholders have already tendered about half Willamette's shares in an offer which would trigger a poison pill if concluded, and they are now considering votes for three director candidates nominated by a bidder whose objective must be to minimize rather than maximize the price paid to Willamette shareholders.
    Considering these circumstances, I have agreed to organize and advise a "Forum" for Willamette shareholders.  Open to all shareholders, whatever their views or positions, the Forum is intended to facilitate access to the information needed for investment decisions as well as to facilitate effective communication of the full range of investor views to your board.  I hope you will encourage Forum participation by the broadest range of shareholders.
 
    It is my current plan to concentrate the Forum's initial focus on the definition of conditions for a "Model Merger" which might provide a basis for the cooperative negotiation of a transaction with Weyerhaeuser to maximize Willamette's realizable shareholder value.  The Model Merger will be submitted to the Forum's shareholder participants for consideration, and a survey report of their views will be then be presented to your board.  I will welcome your advice on how to make the Model Merger and associated shareholder survey as relevant as possible to your board's needs for guidance.
 
    In concluding, I ask your support of the Forum and trust that you will make effective use of the information it provides.
 
Sincerely yours,
/s/
Gary Lutin

 

 

 

 

Inquiries, requests to be included in email distribution lists, and suggestions of new Forum subjects may be addressed to inquiry@shareholderforum.com.

Publicly open programs of the Shareholder Forum are conducted for free participation of all shareholders of a subject company and any fiduciaries or professionals concerned with their decisions, according to the Forum’s stated "Conditions of Participation." In all cases, each participant is expected to make independent use of information obtained through the Forum, and participation is considered private unless the party specifically authorizes identification.

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Shareholder Forum™ is a trademark owned by The Shareholder Forum, Inc., for the programs conducted since 1999 to support investor access to decision-making information. It should be noted that we have no responsibility for the services that Broadridge Financial Solutions, Inc., introduced for review in the Forum's 2010 "E-Meetings" program and has since been offering with the “Shareholder Forum” name, and we have asked Broadridge to use a different name that does not suggest our support or endorsement.