Weyerhaeuser Slate Boots Willamette CEO

Willamette Industries Inc.’s chief executive was unseated from the lumber-and-paper maker’s board when a slate backing rival Weyerhaeuser Co. and its $7.18-billion hostile bid won election.

CEO Duane McDougall and two outside directors were ousted from the nine-member board when the trio supporting Weyerhaeuser, the third-biggest lumber and paper maker, won 44.1% of Willamette’s shares, while the incumbents won 42.7%.

Federal Way, Wash.-based Weyerhaeuser, which began the acquisition bid for its smaller rival in November, had sought board seats to try to remove Willamette’s takeover defense.

Willamette, based in Portland, Ore., said the election “has done nothing to change our view” that its rival’s $50-a-share offer is too low.

Besides McDougall, the ousted Willamette directors are Kenneth Hergenhan and Robert Smelick. The winners are former Weyerhaeuser executives Thomas Luthy and Robert Lane, and Evelyn Cruz Sroufe, who was an executive at software maker Visio Corp.

Willamette shares rose 30 cents to $49.80, while Weyerhaeuser rose $1.14 to $56.11, both on the NYSE.