Weyerhaeuser/Willamette Purchase Vote Nears, Letter Provides Inside Look at Battle for Control
Press release from the issuing company
Below is the unedited 'body' of the letter Weyerhaeuser's CEO sent to shareholders of Willamette Industries:
February 27, 2001
Dear Willamette Shareholder:
As you know, Weyerhaeuser, one of the world's leading forest products companies, has made an offer to acquire all the outstanding shares of Willamette Industries for $48.00 per share in cash. Our offer represents a 38% premium over Willamette's closing share price on November 10, 2000, the last trading day before our offer was announced, and a premium of approximately 60%to the average share price for the 60 days prior to November 10, 2000. Despite the fact that, as of February 1, 2001, a majority ofWillamette shares had been tendered into our offer, the Willametteboard of directors refuses to negotiate a mutually beneficial transaction. In addition, the Willamette board has delayed the date of Willamette's 2001 annual meeting of shareholders so that your voices in governing the company cannot be heard. We urge you to protect the value of your investment in Willamette by signing, dating and returning the enclosed GOLD proxy card to vote FOR the election of the Weyerhaeuser nominees today.
OUR $48 PER SHARE CASH OFFER PROVIDES
SUPERIOR VALUE TODAY FOR WILLAMETTE SHAREHOLDERS
We believe our offer provides greater value than Willamette can generate as a stand-alone company. Contrary to Willamette's selective analysis of purportedly comparable transactions, our premium is considerably higher than an average of prior transactions in the forest products industry. In fact:
-- our 38% premium exceeds the average premium for the 64 paper
industry company transactions that have occurred since 1990(1)
-- since we announced our offer, the S&P paper and forest
products index(2)(as opposed to Willamette's self-selected
"relevant composite of forest products company stocks ")
increased by only 4.3%(3)
-- while no one can accurately predict future stock prices, an
independent financial analyst has suggested that if
Weyerhaeuser's bid is withdrawn, "the downside in Willamette
stock is substantial (at least to the low $30s, and
(1) November 2000 presentation by Salomon Smith Barney.
(2) Excluding Weyerhaeuser and Willamette.
(3) Calculated from November 10, 2000 to February 20, 2001, the time
period covered in Willamette's February 22, 2001 analysis.
(4) Mark W. Connelly, Credit Suisse First Boston Corporation, "WLL:
It's Not the tender--It's the Vote," January 31, 2001.
We are ready to deliver value to Willamette shareholders--in cash--as soon as the Willamette board permits its shareholders to accept our offer. We have also made it clear and repeat here againthat if Willamette can demonstrate additional value, Weyerhaeuser stands ready to negotiate.
WILLAMETTE'S TACTICS ARE COSTING YOU MONEY
Willamette's board of directors would have you believe that it "takes very seriously (its) fiduciary obligations". A review of the board's actions, however, suggests that the board has priorities other than the best interests of Willamette shareholders. Since the date our offer was announced, the Willamette board has:
-- refused to amend its "poison pill" rights plan or take other
steps that would permit you to accept our offer
-- amended the company's by-laws to eliminate the company's
traditional April annual meeting date and permit the board to
schedule the meeting in its sole discretion
-- failed to call the annual meeting and refused even to say when
it will be held
-- enhanced the "golden parachute" severance arrangements with a
significant number of highly paid employees and established
such arrangements with virtually all the company's salaried
-- engaged in an active campaign of disinformation to foment
opposition to the proposed transaction among Willamette's
employees, customers and the communities in which the company
While the board refuses to negotiate, the value of your shares continues to decrease. Since the December 6, 2000 high following our offer, the total market value of Willamette's shares has fallen by approximately $459 million, or 8.3%.
ELECT DIRECTOR NOMINEES WHO WILL ACT IN YOUR BEST INTERESTS
Weyerhaeuser's nominees are experienced business people with extensive forest products experience. None of them is currently employed by Weyerhaeuser. You should ignore Willamette's rhetoric and focus on what this election is really about:
-- electing directors who believe their duty is to act to
maximize the value of Willamette's shares
-- electing directors who will best protect the value of your
investment in Willamette
-- electing directors who believe that the shareholders--the
owners of Willamette--are entitled to decide whether or not to
accept the Weyerhaeuser offer
Although Willamette is attempting to distract you by questioning the ability of the Weyerhaeuser nominees to represent you, remember that three of the four Willamette directors up for re-election were not directors of public companies at the time they joined Willamette's board. Take control of your investment--vote FOR the election of the Weyerhaeuser nominees by signing, dating and returning the enclosed GOLD proxy card TODAY.
Thank you for your support.
Very truly yours,
Steven R. Rogel
Chairman, President and Chief Executive Officer
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