In the context of improving odds for the election of
Weyerhaeuser's three delegates to Willamette's board, many of Willamette's
shareholders have become inceasingly concerned about the prospects
for continuing conflict between rival factions. Today's WSJ
story about fights over museum rooms, copied below, is a suggestion of
what might be expected for the next year.
These circumstances encourage a renewed focus on
opportunities to resolve differences in an orderly manner, before a
shareholder vote which may cause both the winning and losing sides to
view their positions less flexibly. I am therefore in the process of
preparing a proposal to facilitate the immediate initiation of cooperative
negotiations, and have asked both Willamette's and Weyerhaeuser's chairmen
for their suggestions of relevant conditions or procedures. I will also
welcome suggestions from Willamette's shareholders.
If you have any suggestions or comments, please call
me at my office (212/605-0335) before 3:00PM today so
that I may consider your views before completing the proposal.
GL - 5/29/01
Deals & Deal Makers
Warring Willamette, Weyerhaeuser
Wrangle Over Rooms at Museum
By ROBIN SIDEL
Staff Reporter of THE
War rooms, where rivals plot strategy, are a frequent feature of takeover
battles. But Weyerhaeuser Co.'s unfriendly bid for Willamette
Industries Inc. has sparked what may be a first: room wars.
In a strange twist that gives new meaning to the word hostile, the two
sides wrangled over who can occupy what rooms at the Portland Art Museum,
where Willamette is holding its crucial annual meeting on June 7.
Among the priceless Remingtons and Russells in the museum's collections,
Weyerhaeuser hopes to further its $5.5 billion bid by snaring three seats on
But Willamette booked only the main ballroom for the annual meeting,
leaving five other rooms up for grabs. When Weyerhaeuser found out that its
prey was holding the meeting there, and didn't also reserve the nearby
rooms, it quietly and quickly booked them for nearly $6,000 under the name
of local consultant Ed Grosswiler -- leaving no extra space for Willamette
executives to huddle before and after the event.
Sticky planning issues often emerge when the target of a proxy contest
conducts a shareholder meeting. The company launching the attack usually
wants to hole up in a nearby space so its representatives can tally late
votes and track the meeting's progress, but the target usually doesn't want
its rival too close by.
This room war is particularly delicate because Willamette and people
associated with the Oregon paper company have donated millions of dollars
to the hometown museum. Those benefactors include Chairman William
Swindells and his wife, Ann, who have donated between $500,000 and
$749,000, according to a museum list. Other members of the Swindells
family also are big contributors, and one of the museum's galleries is
even named after one of the Swindells, who are major shareholders of
Willamette has relied heavily on support from the local community to
fight the hostile bid, saying a loss of its independence would be damaging
to Oregon's economy.
So when Mr. Grosswiler told the museum the name of his client a couple of
weeks after he booked the rooms, museum officials were taken aback. The
museum contends that Mr. Grosswiler had initially said the rooms would be
used for a "product launch," but Mr. Grosswiler denies that.
The museum said no way, he couldn't have the rooms after all, rejecting
Weyerhaeuser's offer to give back some of the rooms it had booked. "Your
event poses a unique conflict with existing activities scheduled for the
building," wrote Rob Bearden, director of operations, in a May 21 letter to
Mr. Grosswiler. "Therefore, it has become necessary for your client to
secure an alternate venue for its event scheduled at the museum on June 7."
A credit-card refund receipt was enclosed.
Lucy Buchanan, director of development and marketing for the museum, says
Willamette never asked the museum to throw out Weyerhaeuser, but
acknowledged that the local company's status as a big donor is important for
the private, not-for-profit facility. "Willamette and its family members
have been part of this institution and this community for generations. The
museum really doesn't need to be put in an awkward position in the
community," she explains.
Mr. Bearden could not be reached to comment, but Ms. Buchanan says that
another factor was that the museum staff would have be overwhelmed by two
separate groups, especially after it became apparent that the meeting would
likely be heavily attended by Willamette shareholders.
"Whoever was in the building, we would have had to get them out. It
wouldn't have mattered who it was," Ms. Buchanan adds.
Willamette denies it intentionally pulled the plug on Weyerhaeuser's
plans. "We needed more space than we thought, so [the museum is]
accommodating us," said Willamette spokesman David Reno.
For its part, Weyerhaeuser insists it isn't trying to sabotage the
meeting. "We had believed they had rented all the space they needed. Given
the commotion that Willamette has caused in the Portland area, we felt the
best way to maximize security for all the parties and be as unobtrusive as
possible was to have space in the same facility," says Weyerhaeuser
spokesman Bruce Amundson.
So where will Weyerhaeuser Chief Executive Steve Rogel and other company
representatives be hanging out on June 7? As of now, the company isn't
saying. "We've made alternative arrangements," notes Mr. Amundson, declining
to comment further.
Of course, if Weyerhaeuser ultimately wins the takeover fight, the museum
may have to do swift back-pedaling if it wants access to Weyerhaeuser's
pocketbook. Maybe there is already a Rogel gallery in the works?
Write to Robin Sidel at
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