Weyerhaeuser Makes Hostile Bid for Willamette

Paper and timber company Willamette Industries Inc. angered rivals this year when it unveiled plans to build a machine that would add more capacity to the depressed sector. Now, industry experts say a takeover by Weyerhaeuser Co. could help solve the industry’s problems by eliminating some of that excess production. Weyerhaeuser formally launched a hostile $5.4-billion bid for Willamette that values the company’s 112.5 million shares at $48 each. Weyerhaeuser took the bid directly to shareholders in a cash tender offer after Willamette’s board rejected the unsolicited approach this month. The combined company would be the second-largest North American timber firm, after International Paper Co. Although the price was unchanged from the level already rejected by Willamette’s board of directors, the move was designed to pressure the company into talks. Shares of Portland, Ore.-based Willamette slipped on the New York Stock Exchange, losing 63 cents to close at $49.31. Shares of Weyerhaeuser gained $1 to $44.75 on the NYSE. Willamette said its board will review the offer and make a recommendation to shareholders promptly.