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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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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.
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