Current and incoming members of the Linn County Board of Commissioners Monday signed a proclaimation opposing the hostile takeover bid of Willamette Industries by Weyerhaeuser Co.
The proclaimation follows a letter to the editor written last week by Board Chairman Dave Schmidt, which cited his and the board’s opposition to the takeover attempt launched in November.
“Every citizen of Linn county should be vitally concerned with the attempted hostile takeover of Willamette Industries by Weyerhaeuser Company. We should all be concerned about any further concentration of corporate economic power with the accompanying reduction in market competition,” Schmidt said in the letter. “More importantly, if this takeover succeeds, Linn county and Oregon will lose a company that has long been a strong partner and wonderful contributor to our local communities in so many ways. Local company officials, along with the highest officers of the company, have always made themselves available to meet and discuss local issues involving the company. It is important to all of us to help preserve a corporatte culture that is becoming increasingly rare in placing this degree of cooperation when working with local communities.”
Schmidt told The New Era that Linn county has the most Willamette Industries plants of any county in the nation. (Nine manufacturing facilities in Millersburg, Lebanon and Sweet Home, plus a Western Regional Office in Albany and a trucking division and co generation plant in Millersburg.)
“This (the takeover) would be bad not just for Willamette Industries, but for employees. A lot of timber land would go with this merger. We know Willamette Industries plan and way of doing business, we don’t know Weyerheauser’s scheme.”
Weyerhaeuser has said the merger would provide an opportunity to build a more efficient company, but Schmidt believes that translates into job losses and further concentration of land ownership into fewer hands.
“Weyerhaeuser is a huge company worldwide. I know money talks, but we have other considerations in Linn county,” Schmidt said. “I just don’t want to take the risk.”
Schmidt and fellow commissioners are urging the general public to contact Steven Rogel, CEO, Weyerhaeuser Company, 33663 Weyerhaeuser Way S., Federal Way, Wash. 98001-9620.
“He needs to know our communities feel very strongly about keeping Willamette Industries an independent company,” Schmidt added in his letter.
Last Wednesday, Duane McDougall, president and CEO of Willamette Industries announced that the W.I. board is not interested in a sale.
“Our Board’s position remains clear and unanimous–Willamette is not for sale. We have a proven track record as an independent company of delivering shareholder value. We have a strong, results-oriented culture; we are the most vertically integrated, low-cost producer in our industry and we have effectively deployed our capital and assets over the course of many years. As a result of these intangibles, we are extremely well positioned to continue to produce earnings per share growth in excess of our peer group over the cycle. With approximately $1 billion of investments in new value enhancing projects since 1997, we are optimistic about our future.”
McDougall said the board considered a number of factors in making its decision. Among them:
– The offer price of $48 per share is inadequate and does not reflect the long-term value of the company.
– The offer price does not reflect significant value-enhancing initiatives taken by Willamette over the last few years aimed at seizing market opportunity and increasing earnings per share. Those initiatives could produce in excess of $340 million in annual earnings before interest, taxes, depreciation and amortization.
– Over the last 10 years, the company’s earnings per share growth has been more than five times the industry composite and three times the large cap composite.
– The Board believes the Weyerhaeuser offer is an opportunistic attempt to acquire one of the industry’s leading franchises when stock prices are depressed.
-The company is not for sale, but that the Weyerhaeuser offer is considerably less than the company’s real value.