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News > Deals
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Willamette nears GP deal
graphic January 10, 2002: 4:53 p.m. ET

Company would purchase GP building products unit for $3B-to-$3.5B in cash.
By Staff Writer Luisa Beltran
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  • Willamette finally opens merger talks with Weyerhaeuser. -- Dec. 18, 2001
  • Willamette turns down Weyerhaeuser offer -- Jan. 4, 2002
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    NEW YORK (CNN/Money) - Willamette Industries, which last week rejected a sweetened takeover offer from Weyerhaeuser Co., is about to close on the purchase of a Georgia-Pacific Corp. unit, a move aimed at pushing Weyerhaeuser away, a source told CNN/Money Thursday.

    The source, who spoke to Georgia-Pacific, said Willamette has nearly completed its due diligence and has agreed to pay about $3 billion-to-$3.5 billion in cash for GP's buildings product unit. Willamette will acquire a majority stake of the unit and the deal will be fashioned as a joint venture so GP can defer taxes, the source said.

    A Willamette buy of GP's building products unit would create a leading producer of certain wood products in North America. Weyerhaeuser has said that it would withdraw its bid if Willamette signs a deal for GP's building products.

    The acquisition needs only board approval from both companies and a fairness opinion, the person said. GP is not using an outside investment bank to advise it on the deal.

    An announcement could come as early as next week or, at least, by the end of the month, the source said.

    "Discussions related to structure and the due diligence process are moving forward," Willamette spokeswoman Jackie Lang said. "But we are not close to announcing a price or a structure of the deal."

    Discussions between the two companies have progressed smoothly. "It is to our advantage that we have a willing seller and a willing buyer," she said.

    A Georgia-Pacific spokeswoman said that the two companies continue to review a possible business combination.

    Federal Way, Wash.-based Weyerhaeuser could not be reached for comment.

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    News of the GP deal comes as Weyerhaeuser (WY: up $0.02 to $53.39, Research, Estimates) claims to have nearly two-thirds of Willamette shares tendered in support of its $6.1 billion hostile bid. Weyerhaeuser said Thursday that it had roughly 70 million, or 64 percent, of Willamette shares were tendered and not withdrawn in support of the $55 a share cash offer.

    Shares of Willamette surged nearly 7 percent Thursday while Weyerhaeuser shed nearly 2 percent.

    Portland, Ore.-based Willamette (WLL: down $0.20 to $46.25, Research, Estimates) has consistently spurned Weyerhaeuser's overtures. Last week, Willamette again rejected Weyerhaeuser's sweetened $55 per share, all-cash bid. Weyerhaeuser first offered to buy the smaller paper products maker in November 2000 for $48 per Willamette share. Weyerhaeuser then raised its bid to $50 per share, or $5.5 billion, over the summer and then again in early December to $55 per share, only to see Willamette turn to a plan to buy the Georgia-Pacific unit.

    Willamette can still pursue its GP transaction even though Weyerhaeuser claims to have 64 percent of shares tendered for its bid. Weyerhaeuser's $6.1 billion offer is inadequate, a Willamette spokeswoman said.

    "Weyerhaeuser is not willing to pay a fair price for what we believe is industry's No.1 company," Lang said. "Weyerhaeuser's response shows they were never serious about paying Willamette shareholders what we regard is full value for their shares." graphic

      RELATED STORIES

    Willamette finally opens merger talks with Weyerhaeuser. -- Dec. 18, 2001

    Willamette turns down Weyerhaeuser offer -- Jan. 4, 2002





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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: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. 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 2018 and/or its affiliates.

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