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BRIEFLY / LUMBER

Willamette Industries Rejects Weyerhaeuser Bid

November 16, 2000|Reuters

Timber and paper company Willamette Industries Inc. rejected a $5.3-billion unsolicited offer from rival Weyerhaeuser Co., saying the bid did not reflect its value or growth potential. Portland, Ore.-based Willamette also accused its suitor of taking advantage of poor industry conditions that have battered stock prices. The move, which had been widely expected, means that Federal Way, Wash.-based Weyerhaeuser must now decide if it will take the offer directly to Willamette shareholders in a formal hostile tender offer. Willamette has strong corporate defenses to fend off an unwelcome suitor, but merger experts believe shareholder pressure will force the company to eventually accept a deal at a higher price. The bid values Willamette at $48 a share and also calls for Weyerhaeuser to assume $1.7 billion in Willamette debt. It represents a 38% premium to Willamette's recent stock price and comes amid a rash of industry consolidation that has been spurred by low prices and weak demand for lumber. On the New York Stock Exchange, Willamette rose 81 cents to $46.94, and Weyerhaeuser closed up $1 at $42.63.

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