Willamette OKs Takeover Offer From Rival Timber Giant Weyerhaeuser
{{#rendered}} {{/rendered}}Willamette Industries said Monday it has agreed to a sweetened $6.1 billion takeover offer by rival Weyerhaeuser, ending 14 months of jockeying between the two timber giants.
The companies said Weyerhaeuser will pay $55.50 per share in cash, 50 cents per share more than what Weyerhaeuser chairman Steven Rogel last month called his final offer. Weyerhaeuser also agreed to pay about $1.7 billion in debt and other expenses.
Willamette said its board is expected to consider the deal before the end of the month. The company also said it had ended negotiations with Georgia-Pacific Corp. to buy its troubled building products division.
{{#rendered}} {{/rendered}}Rogel had said any deal with Georgia-Pacific would have ended the Weyerhaeuser bid.
Analysts had warned about potential problems with the purchase of the Georgia-Pacific division, while Willamette shareholders had been putting pressure on the board to consider the Weyerhaeuser offer.
With the agreement, Rogel finally succeeded in what had become a four-year effort to buy Willamette, which he left late in 1997 to become the first outsider chosen to as rival Weyerhaeuser's chairman since that company was founded a century ago.
{{#rendered}} {{/rendered}}Rogel announced the hostile takeover in November 2000 after Willamette chairman William Swindells Jr. and his board of directors repeatedly rejected a deal with Weyerhaeuser.
The $55.50 per share offer represents an 18 percent premium to Willamette's closing price Friday.
Willamette shares rose $1.09 to close at $47.10 in trading Friday on the New York Stock Exchange, where Weyerhaeuser shares rose 18 cents to $51.51. U.S. markets were closed Monday in observance of Martin Luther King Jr.'s birthday.
{{#rendered}} {{/rendered}}Weyerhaeuser reported earlier this month that about 64 percent of Willamette shareholders had tendered their shares in favor of a merger.
Weyerhaeuser is the nation's third-largest timber products company, and Willamette is the seventh-biggest.
Weyerhaeuser, with an estimated $15.6 billion in 2001 sales, already is the largest private owner of softwood timber in the world, managing 38 million acres of owned, leased and licensed forest in the United States and Canada.
{{#rendered}} {{/rendered}}Willamette, by comparison, owns just 1.7 million acres of timber land but it has 105 mills in the United States, France, Ireland and Mexico. Estimated sales for 2001 are $4.6 billion.