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Willamette sets deadline
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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. 
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