Financial Times; Jan
By ANDREW EDGECLIFFE-JOHNSON
Weyerhaeuser was frus-trated again
yesterday in its 14-month pursuit of Willamette Industries after the
rival forest products group rejected its Dollars 6bn takeover offer.
Shares in Willamette plunged 12 per cent to Dollars 44.15 by
lunchtime after the target said it would terminate discussions on the
Dollars 55 per share all-cash offer, because it was inadequate. The
stock rose last month when Willamette said it would discuss the bid.
Weyerhaeuser said it "remained committed to this transaction", but
repeated that Dollars 55 per share was the highest price it was prepared
The group added it would withdraw its bid if Willamette went ahead
with a proposed bid for the building materials business of
Georgia-Pacific, another forest products group. Willamette said it would
continue negotiations with Georgia-Pacific as it believed this deal
would create significant shareholder value.
Weyerhaeuser raised the prospect of extending its long proxy battle
until the summer, saying it would propose another three nominees for
election to Willamette's board at the next annual meeting.
It secured three seats on its rival's board at Willamette's
shareholder meeting last July.
Some shareholders and corporate governance activists expressed
frustration with Willamette yesterday.
Gary Lutin, an investment banker who acts as a corporate governance
adviser, said: "Shareholders have the weapons to influence the outcome.
The question is whether any of them have the stomach to do so."
Peter Schoenfeld, chairman of P Schoenfeld Asset Management and a
Willamette shareholder, added: "Shareholders should have the opportunity
to vote on the Georgia-Pacific transaction, particularly since it is in
the middle of a proxy fight and a tender offer."