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Shares of Willamette Drop Sharply

January 05, 2002|From Bloomberg News

Willamette Industries Inc. shares fell 8.4%, their biggest drop in more than a year, after the company rejected rival lumber-and-paper maker Weyerhaeuser Co.'s $7.76-billion hostile takeover bid.

The shares dropped $4.21 to $45.75, falling earlier to $43.61, the biggest decline since October 1997. The companies held talks last month over the bid of $55 per share for the first time since Weyerhaeuser disclosed the offer more than a year ago.

"It's a very bad outcome for shareholders if [Willamette] actually lets this deal go away," said Steve Cohen, chief investment officer of Kellner, Dileo & Co. "It's extremely disappointing from every shareholder's standpoint on how this board has conducted itself."

Weyerhaeuser Chief Executive Steven Rogel has been pursuing Portland, Ore.-based Willamette, at first privately, since he quit as Willamette's CEO in December 1997 to run Weyerhaeuser. He wants Weyerhaeuser, the third-biggest forest-products company, to become bigger with larger customers. Analysts call Willamette's plants among the most profitable in the business.

Shares of Weyerhaeuser, based in Federal Way, Wash., rose $1.53 to $55.52. Both companies trade on the New York Stock Exchange.

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