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: May 29, 2001 Letter Proposing Negotiation in $55-60/share Range

(May 30, 2001)

From: Gary Lutin
To: Distribution: Willamette Shareholders
Sent: Wednesday, May 30, 2001 7:36 AM
Subject: Responsibility to negotiate in $55-60/share range

 
Copied below is the text of a letter sent yesterday to the chairmen of both Willamette and Weyerhaeuser, encouraging their immediate initiation of cooperative negotiations within a $55 to $60 per share value range as "a simple matter of responsibility to [their] respective shareholders."
 
Based on the essential foundations and proposed negotiating conditions summarized in the letter, there is no reason why both sides would not be able to confirm their intent to proceed with a cooperative transaction by June 5th, in time to avoid the July 7th showdown vote.  The $55 to $60 per share range cannot be credibly disputed by either side and is less than 10% apart.  Any failure to proceed cooperatively under these circumstances would raise questions about continuing shareholder reliance on the managements of both companies.
 
                    GL - 5/30/01
 

5/29/01 letter to Messrs. Rogel & Swindells
 
[Letterhead]
LUTIN & COMPANY
575 MADISON AVENUE, 10th FLOOR
NEW YORK, NEW YORK 10022
Telephone (212) 605-0335
Facsimile (212) 605-0325
 
By telecopier
May 29, 2001
 
Mr. Steven Rogel
Chairman, Board of Directors
Weyerhaeuser Company
Post Office Box 2999
Tacoma, Washington 98063
 
Mr. William Swindells
Chairman, Board of Directors
Willamette Industries, Inc.
1300 Southwest Fifth Avenue, Suite 3800
Portland, Oregon 97201
 
Gentlemen:
 
    As indicated in my previous communications with each of you, separately, it is widely believed that the shareholders of both Willamette and Weyerhaeuser would benefit from a combination of the two companies, and also that such a combination could be optimized by cooperative negotiations.
 
    Some Willamette shareholders have expressed concern that the current adversary process, focused now on a contest for board seats, may escalate after a vote regardless of which side wins. I therefore encourage your shift in focus to develop a more orderly and effective process, based on the following foundations:
 
1.    A combination of the Willamette and Weyerhaeuser business operations is strategically optimal.
 
2.    Willamette's value can be enhanced by at least 5% if the combination of operations and terms of the transaction are cooperatively defined.
 
3.    It is reasonable to assume, based on ranges of professional views and Weyerhaeuser's current bidding position, that paying a price of at least $55 per share for Willamette would be justifiable to the shareholders of Weyerhaeuser.
 
4.    It is equally reasonable to assume that a price of $60 per share would satisfy most Willamette shareholders.
 
    In summary, the real bidding distance is actually less than 10%, clearly within a range that should permit cooperative negotiations. Under these circumstances, your immediate initiation of good faith negotiations is for each of you a simple matter of responsibility to your respective shareholders. The following conditions are proposed to facilitate your progress:
 
A.    Each side will commit to explorations of a basis for defining general terms of a transaction in a value range from $55 to $60 per share, subject to due diligence.
 
B.    If any issue cannot be resolved directly between the parties, both sides may provide me with explanations of their positions and I will respond with a recommendation which includes a time period for dealing with it. If the issue is not resolved by the parties within the required time, the negotiations will be considered suspended.
 
C.    If either party wishes to establish any negotiating conditions other than conventional confidentiality agreements, those conditions should be presented to the other party by the end of business tomorrow.
 
D.    Both parties will report preliminary progress of the negotiations on or before June 5, 2001.
 
E.    If both parties confirm their beliefs by June 5th that a transaction can be defined in the $55 to $60 per share range, or in any stated alternative range to which both sides have agreed, appropriate arrangements will be made to resolve the contest for board seats or to adjourn the annual meeting until shareholders can be informed of relevant alternatives.
 
F.    If Weyerhaeuser does not confirm by June 5th that it believes it will be able to justify a price of at least $55 per share, Weyerhaeuser's delegates will withdraw as candidates for Willamette's board of directors.
 
G.    If Willamette's board does not confirm by June 5th that it believes it will be able to recommend a sale at $60 or less per share, it will state its minimum price and provide the details of any supporting research or expert opinions on which the pricing is based.
 
    Assuming that you do not disagree with the foundations of this proposal, which were presented to each of you previously, I will of course continue to welcome your suggestions of additional or modified conditions.
 
Sincerely yours,
/s/
Gary Lutin

 

 

 

 

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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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