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News > Deals
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Willamette sets deadline
graphic October 11, 2001: 5:30 p.m. ET

Forest products company is willing to discuss reasonable offer from Weyerhaueser.
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NEW YORK (CNNmoney) - In the latest barrage in the war of words between Willamette Industries and Weyerhaeuser Inc., the paper products company's top executives said in a letter Thursday they would consider selling if Weyerhaeuser upped its offer.

In a message to Weyerhaeuser's (WY: Research, Estimates) CEO Steven Rogel, Willamette Chairman William Swindells and CEO Duane McDougall said the company's value is in the $60-a-share range, but that they would consider an offer in the high-$50 range.

The company also said a 5:00 p.m. PT (8:00 p.m. ET) deadline for Oct. 16 for Weyerhaeuser to respond, or otherwise withdraw its offer and cease its hostile takeover bid.

Willamette (WLL: up $0.65 to $45.65, Research, Estimates) has repeatedly rejected Weyerhauser's offers, the first of which came last November for $48 a share, but has since been raised to $50 a share.

"We continue to believe Weyerhaeuser's existing offer is woefully inadequate," Swindells and McDougall said in their letter. "To offer a path forward, if you make a written offer in the high $50s, we will agree to sit down for discussions regarding a possible combination of our two companies. These discussions would also need to include ways to mitigate the impact on our communities and employees."

The letter states that a merger of the two companies create the potential for synergies of up to $645 million in addition to the creation of an additional $1.1 billion, or $10 a share, in shareholder value.

If Weyerhaeuser is unwilling to pay what this company is worth, we will continue to pursue our strategic plan, which may include a significant business combination, recapitalization or other strategic or financial alternatives," the letter said.

The letter comes a day after Willamette reported a 21 percent drop in third-quarter earnings reflecting sluggish U.S. demand, and warned that the traditionally slow fourth quarter would be tougher than ever, especially for building materials.

Portland, Ore.-based Willamette posted net income of $65.8 million, or 60 cents a share, excluding items, compared with $83.4 million, or 76 cents a share, a year earlier. Sales fell to $1.12 billion from $1.17 billion.

On June 7, Federal Way, Wash.-based Weyerhaeuser secured three seats on Willamette's board and needs three more to achieve a majority.

Buying Willamette would create the world's third-largest paper and forestry products producer, behind International Paper and Georgia-Pacific, with annual revenue of more than $16 billion. graphic





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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.

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