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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[X] Soliciting Material Under Rule 14a-12
Willamette Industries, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
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was paid previously. Identify the previous filing by registration statement
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The following commentary was published in The Oregonian on December 26, 2000.
Sale of Willamette makes no sense on many counts
Weyerhaeuser's attempt is 'an opportunistic grab' for a company already embarked
on a successful long-term strategy
Tuesday, December 26, 2000
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IN MY OPINION William Swindells
There appears to be considerable confusion and misinformation about Willamette
Industry's battle against Weyerhaeuser's hostile takeover attempt.
News coverage has accurately portrayed the opinion of a majority of Wall Street
analysts. However, our company feels that much of what those investment analysts
say is incorrect.
As The Oregonian noted in a news article ("Views differ on Willamette," Dec.
18), some analysts want a deal primarily because they believe it will reduce
capacity in the industry and push up prices. Notwithstanding the fact that this
implied collusion borders on illegality, removing the industry's low-cost
producer won't help the industry.
Willamette Industries and Weyerhaeuser are both in highly competitive commodity
types of businesses that are affected not only by domestic production and demand
but also by world markets. The strength of the dollar or the Asian and European
economies affect prices as much as domestic demand and production levels.
With little control over pricing, the only way any company can make a profit is
by improving its cost structure, thus being able to sell competitively in these
global markets. Apparently the paper industry analysts, critical of our
investment in a Kingsport, Tenn., mill, do not feel that the new economy, with
modern technology and increased productivity to hold down inflation, applies to
our paper mills. The investment analysts do not say why Willamette Industries'
shareholders should sacrifice an opportunity for economic gain to help the
industry. We do not think this is the obligation of Willamette shareholders.
While almost all companies in the paper business lost money during the past
decade, Willamette's sole losing year in its history came in the early 1980s. In
fact, our total annualized return to stockholders in the past five years has
been more than 161/2 percent and about 151/2 percent in 10 years, a level that
should compare favorably with any other company in the industry. Analysts will
also tell you that Willamette is the only company in the industry able to
recover the cost of capital.
In some circles, Willamette is indeed a pariah on Wall Street. However, in the
several months before the Weyerhaeuser offer was announced, our stock price was
outpacing the industry in growth, because despite concerns about the industry as
a whole, Willamette's performance has been superior and continues to be.
We feel that Willamette Industries is big enough. We are able to serve all of
our customers domestically, while gradually expanding in the international
marketplace and without falling victim to the bureaucracy and lack of
flexibility attendant with very large companies like Weyerhaeuser. We want to
grow to benefit Willamette shareholders, not the shareholders of the other
companies.
It is important to readers to understand why we are fighting Weyerhaeuser. We
have confidence that our long-term strategy will bring success both to our
company and to our community. This is why we have chosen to fight so resolutely
against this takeover.
Weyerhaeuser's attempt to acquire Willamette is an opportunistic grab at what
almost everyone agrees is one of the forest products industry's best and most
profitable companies. Its offer is not a good deal for Willamette or its
shareholders, employees, customers and communities. It dramatically undervalues
our company and would reduce competition in our industry.
Readers should also understand the potential consequences for Portland and for
Oregon should the city lose one of its last Fortune 500 companies -- a company
employing 3,500 people in Oregon and a company that contributes hundreds of
millions of dollars annually to Oregon's economy.
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William Swindells is chairman of the board of Willamette Industries.
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INFORMATION REGARDING PARTICIPANTS
Willamette Industries, Inc. ("Willamette" or the "Company") and the
following persons may be deemed to be "participants" in Willamette's
solicitation of proxies from Willamette stockholders in connection with (i) the
offer by Company Holdings, Inc. ("Holdings"), a Washington corporation and a
wholly owned subsidiary of Weyerhaeuser Company, a Washington corporation,
("Weyerhaeuser") to purchase all of the outstanding common stock, par value
$0.50 per share, (including the associated rights to purchase shares of Series B
Junior Participating Preferred Stock) of the Company (the "Willamette Common
Stock") and (ii) the preliminary proxy statement filed by Weyerhaeuser and
Holdings with the Securities and Exchange Commission in connection with the
election of the nominees of Weyerhaeuser and Holdings to the Willamette Board of
Directors at the Willamette 2001 annual meeting of shareholders: (a) the
directors of Willamette, (b) the following executive officers of Willamette:
Duane C. McDougall (President and Chief Executive Officer) and Greg Hawley
(Executive Vice President, Chief Financial Officer, Secretary and Treasurer) and
(c) Cathy Dunn (Vice President, Communications).
The interests of the foregoing individuals in this solicitation consist of
their beneficial ownership of (i) shares of Willamette Common Stock and (ii)
options to purchase Willamette Common Stock (the "Willamette Options").
Additional information with respect to these items is set forth below.
<TABLE>
<CAPTION>
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Name and Title Shares of
Shares of Willamette Willamette Options
Common Stock Beneficially Owned
Beneficially Owned (1) (1)(2)
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<S> <C> <C>
Winslow Buxton 2,332 (3) 1,067 (5)
(Director)
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Cathy Dunn 27,410 (3) 29,993 (4)(6)
(Vice President, Communications)
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Gerard K. Drummond 4,000 5,600 (5)
(Director)
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Greg Hawley 1,471 8,543 (4)
(Executive Vice President, Chief Financial
Officer, Secretary and Treasurer)
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Kenneth W. Hergenhan 2,372 4,400 (5)
(Director)
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Duane C. McDougall 22,391 (3) 72,486 (4)
(Director, President and Chief Executive
Officer)
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Joseph Prendergast 2,500 4,400 (5)
(Director)
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Stuart J. Shelk, Jr. 1,678,915 (3) 5,600 (5)
(Director)
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Robert Smelick 4,000 5,600 (5)
(Director)
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William Swindells 4,471,942 (3) 254,530 (7)
(Chairman of the Board of Directors)
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Michael G. Thorne 800 -
(Director)
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Benjamin R. Whiteley 7,500 5,600 (5)
(Director)
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</TABLE>
(1) As of November 30, 2000, shares and options are included in the table as
"beneficially owned" if the person named has or shares the right to vote or
direct the voting of or the right to dispose or direct the disposition of
such shares or options. Inclusion of shares or options in the table does
not necessarily imply that the persons named receive the economic benefits
of the shares so listed.
(2) Options included are those exercisable within 60 days after November 30,
2000.
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(3) Includes shares as to which the individual shares voting and dispositive
power as follows: Mr. Buxton, 1,000 shares; Mr. Shelk, 18,120 shares; Mr.
Swindells 2,426,568 shares, Mrs. Dunn 11,489 shares; and Mr. McDougall, 32
shares.
(4) Options granted under the Company's 1995 Long-Term Incentive Compensation
Plan (the "1995 Plan") and its 1986 Stock Option and Stock Appreciation
Rights Plan (the "1986 Plan").
(5) Options granted under the non-employee director provisions of the 1995
Plan.
(6) Includes options as to which the individual shares voting and dispositive
power as follows: Mrs. Dunn, 15,627 options.
(7) Includes 3,200 options granted under the non-employee director provisions
of the 1995 Plan.
Pursuant to a letter agreement dated September 4, 2000, Willamette
retained Goldman, Sachs & Co. ("Goldman Sachs") to render financial advisory
services to the Company in connection with Weyerhaeuser's offer and certain
related matters. Willamette has agreed to pay Goldman Sachs a fee equal to 0.40%
of the aggregate value of any transaction in the event (i) at least 15% of the
outstanding stock of Willamette is acquired by a third party or (ii) all or
substantially all of the assets of Willamette are sold. If no transaction is
completed as of September 1, 2001, Willamette has agreed to pay Goldman Sachs a
fee of $30 million upon the occurrence of certain triggering events. A
triggering event has occurred, and the first of five equal quarterly
installments will be paid on September 1, 2001 if no transaction has been
consummated as of that date. In addition, Willamette has agreed to reimburse
Goldman Sachs for its reasonable out-of-pocket expenses.
In connection with the engagement of Goldman Sachs as financial
advisor, the Company anticipates that employees of Goldman Sachs may communicate
in person, by telephone or otherwise with certain institutions, brokers or other
persons who are stockholders for the purpose of assisting in the solicitation of
proxies. Although Goldman Sachs does not admit that it or any of its directors,
officers, employees or affiliates is a "participant," as defined in Schedule 14A
promulgated under the Securities and Exchange Act of 1934, as amended, by the
Securities and Exchange Commission, or that Schedule 14A requires the disclosure
of certain information concerning them, Robert Pace (Managing Director), Ravi
Sinha (Managing Director), Kirk Pulley (Vice President), Kevin Guidotti (Vice
President) and Kevin Sofield (Associate), in each case of Goldman Sachs
(collectively, the "Financial Adviser Participants"), may assist the Company in
the solicitation of proxies for the annual meeting.
Goldman Sachs has provided financial advisory and investment banking
services to the Company from time to time for which they have received customary
compensation. In addition, Goldman Sachs has provided financial advisory and
investment banking services to Weyerhaeuser Company in the past for which it has
received customary compensation. Goldman Sachs engages in a full range of
investment banking, securities trading, market-making and brokerage services for
institutional and individual clients. In the ordinary course of its business,
Goldman Sachs may actively trade securities of the Company for its own account
and the account of its customers and, accordingly, may at any time hold a long
or short position in such securities. Goldman Sachs has advised the Company that
as of December 21, 2000, Goldman Sachs held a net long position of approximately
23,232 shares of Willamette Common Stock. Except as set forth above, to the
Company's knowledge, none of Goldman Sachs, or any of the Financial Advisor
Participants has any interest, direct or indirect, by security holdings or
otherwise, in the Company.
