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COMPANIES & MARKETS: Willamette accepts rival's Dollars 6bn bid
Jan 22, 2002
By PETER THAL LARSEN
Willamette, the forest products group, yesterday finally agreed to
give up its independence when it accepted a Dollars 6.1bn cash bid
from its rival Weyerhaeuser.
Willamette said it had agreed in principle to accept a bid valuing
the company at Dollars 55.50 a share - an increase of Dollars 0.50
over Weyerhaeuser's most recent offer - subject to the negotiation
of a definitive merger agreement.
The agreement ends an acrimonious, 14-month takeover battle that
pitted Steven Rogel, the former Willamette chief executive who now
runs Weyerhaeuser, against his former colleagues.
The deal represents a vindication for Mr Rogel in persisting.
However, Willamette's defences have forced Weyerhaeuser to offer a
higher price than it intended.
The price of Dollars 55.50 represents a 60 per cent premium over
Willamette's share price on November 10 2000, the day before
Weyerhaeuser launched its original Dollars 48-a-share cash bid. Last
Friday, the last trading day before the announcement, Willamette
shares closed at Dollars 47.10.
The agreement, subject to approval by the boards of both companies,
will bring about long-awaited consolidation in the forest products
industry, which has been suffering from overcapacity.
Willamette appeared to be nearing a deal to take control of the
building products operations of Georgia-Pacific, a rival paper
group. Willamette said yesterday those negotiations had ended.
The deal will be welcomed by Willamette's shareholders who,
infuriated by the company's resistance, this month voted
overwhelmingly in favour of Weyerhaeuser's Dollars 55-a-share bid.
Recently Willamette was hit with a lawsuit filed by veteran
arbitrageur Guy Wyser-Pratte and Franklin Resources, the activist
fund management group. Another arbitrage firm, Peter Schoenfeld
Asset Management, threatened a proxy fight while California
Employees' Public Retirement System, the huge US pension fund, had
complained to Willamette's board.
Mr Rogel approached his former employer earlier in 2000 with a
private offer of Dollars 43 a share. Even after Weyerhaeuser won a
vote to elect three of its directors to Willamette's board the
company continued its resistance.
Weyerhaeuser said it would accelerate closing its existing tender
offer to ensure shareholders received their money quickly.