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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
(Amendment No. 1)
(RULE 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER
SECTION 14(d)(4) OF THE SECURITIES EXCHANGE ACT OF 1934
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WILLAMETTE INDUSTRIES, INC.
(Name of Subject Company)
WILLAMETTE INDUSTRIES, INC.
(Name of Person(s) Filing Statement)
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Common Stock, Par Value $0.50 Per Share
(Title of Class of Securities)
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969133107
(CUSIP Number of Class of Securities)
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DUANE C. MCDOUGALL
President and Chief Executive Officer
Willamette Industries, Inc.
1300 S.W. Fifth Avenue, Suite 3800
Portland, OR 97201
(503) 227-5581
(Name, Address and Telephone Number of Person authorized to Receive Notice and
Communication on behalf of the Person(s) Filing Statement)
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With a copy to:
GARY L. SELLERS, ESQ.
MARIO A. PONCE, ESQ.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
(212) 455-2000
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[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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This Amendment No. 1 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") originally filed on December
5, 2000, by Willamette Industries, Inc., an Oregon corporation ("Willamette" or
the "Company"), relating to the offer by Company Holdings, Inc., a Washington
corporation (the "Purchaser") 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. Capitalized terms used but not defined herein have the meanings
ascribed to them in the Schedule 14D-9.
ITEM 3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Item 3(c) is hereby amended by deleting the definition of the term
"Employees" and defining the term to mean all employees with an annual salary
equal to or in excess of $144,000 and certain other employees deemed advisable
by the Board.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
Item 4(a) is hereby amended and restated in its entirety as follows:
At a meeting held on December 11, 2000, Willamette's Board of Directors
carefully considered the terms and conditions of the Weyerhaeuser Offer,
extensive presentations by management and its legal and financial advisors and
other relevant factors permitted by applicable law, including the social, legal
and economic effects on employees, customers and suppliers of the Company and
on the communities and geographical areas in which the Company and its
subsidiaries operate, the economy of the state and the nation, the long-term as
well as the short-term interests of the Company and its shareholders, as well
as the possibility that these interests may be best served by the continued
independence of the Company.
FOR THE REASONS DESCRIBED BELOW, WILLAMETTE'S BOARD OF DIRECTORS UNANIMOUSLY
CONCLUDED, AMONG OTHER THINGS, THAT THE WEYERHAEUSER OFFER IS INADEQUATE AND
NOT IN THE BEST INTERESTS OF THE COMPANY, ITS SHAREHOLDERS AND OTHER
CONSTITUENCIES. ACCORDINGLY, THE BOARD UNANIMOUSLY RECOMMENDS THAT ALL HOLDERS
OF WILLAMETTE COMMON STOCK REJECT THE WEYERHAEUSER OFFER AND NOT TENDER THEIR
SHARES TO THE PURCHASER.
Reasons for the Board of Directors' Recommendation.
In reaching its conclusions and recommendation described above, Willamette's
Board of Directors considered a number of factors, including the following:
. The Board's belief, based on the factors further described below, that
the Offer Price is inadequate and that the Weyerhaeuser Offer does not
reflect the long-term value inherent in the Company;
. The Board's familiarity with the business, financial condition,
prospects and current business strategy of the Company, the nature of
the industries in which the Company operates and the Company's strong
position in these industries;
. The Board's belief that the Offer Price does not reflect the significant
value-enhancing initiatives taken by the Company over the last few years
aimed at seizing market opportunity and increasing earnings per share
growth; and management's belief that, based on the current pricing
environment, if all of the value-enhancing initiatives were complete,
they would add in excess of $340 million to annual earnings before
interest, taxes, depreciation and amortization;
. The opinion of the Company's management as to the Company's prospects
for future growth and profitability, based on its knowledge of the
Company's businesses, its views as to the Company's long-term strategic
plan, the various value-enhancing opportunities available to the Company
in the future and recent trends and developments in the industry;
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. The disruptive effect consummation of the Weyerhaeuser Offer would have
on the Company's employees, suppliers and customers and the communities
and geographical areas where the Company operates;
. The fact that over the last ten years, the Company's earnings per share
growth has been more than five times the industry composite/1/ and
nearly three times the large cap composite/2/;
. The fact that over the last two years ending November 10, 2000 (the last
trading day prior to the public announcement of the November 6
Proposal), the performance of the Willamette Common Stock has exceeded
both the Standard & Poors ("S&P") Paper and Forest Products Index and
the S&P 500;
. The fact that the stock price performance of the Willamette Common Stock
has been double that of the S&P Paper and Forest Products Index over the
period 1991 to 2000 (through November 10, 2000), and has almost matched
the S&P 500 performance over that period (despite a very difficult
decade for the industry and an extraordinarily good performance for the
S&P 500);
. The fact that, prior to the public announcement of the November 6
Proposal, the Willamette Common Stock traded at a 52-week high of $50.50
in January 2000 and an all-time high of $52.13 in July 1999;
. The Board's belief, in light of the terms of the Weyerhaeuser Offer, the
Company's inherent earnings power and long-term strategic plan, that the
interests of the Company, its shareholders and other constituencies
would best be served by the Company continuing as an independent entity;
. The Board's view that the Weyerhaeuser Offer is an opportunistic attempt
to acquire one of the industry's leading franchises when stock prices
are depressed;
. The fact that the Company is not for sale, but that if it were for sale,
the Board noted the following factors that indicated that Weyerhaeuser
or another party should be willing to pay significantly in excess of the
Offer Price:
. The Board's belief that based on the $300 million in synergies that
Weyerhaeuser has publicly projected (and the $330 to $645 million
synergy range provided by Weyerhaeuser to the Company in a private
meeting in September 1998) and the analysts' consensus earnings and
cash flow estimates for Weyerhaeuser and the Company, Weyerhaeuser
could pay significantly in excess of the Offer Price;
. The fact that the Offer Price is below the market price of $49.00
of the Willamette Common Stock on the New York Stock Exchange on
December 11, 2000, the last trading day prior to the date of this
Amendment to the Schedule 14D-9;
. The fact that premiums paid in comparable industry deals over the
last six months exceed the premium implied by the Weyerhaeuser
Offer; for instance, Stora Enso paid a 69% premium (relative to the
day prior to the announcement) for Consolidated Papers, a 34%
premium to Consolidated Papers' 52-week high, and a 28% premium to
its all time high while the Weyerhaeuser Offer values the
Willamette Common Stock at a 38% premium relative to the day prior
to the public announcement of the November 6 Proposal, a 5%
discount to its 52-week high and an 8% discount to its all time
high; and
. The Board's belief that, based on the increased stock prices of
comparable companies in the industry since November 10, 2000, the
premium implied by the Weyerhaeuser Offer (relative to the day
prior to the public announcement of the November 6 Proposal) is
significantly lower than 38%;
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/1/The industry composite is comprised of Boise Cascade Corporation, Bowater
Inc., Chesapeake Corporation, Georgia-Pacific Corporation, International Paper
Company, Longview Fibre Company, Louisiana Pacific Corporation, Mead
Corporation, Temple Inland, Inc., Westvaco Corporation and Weyerhaeuser
Company.
/2/The large cap composite is comprised of International Paper Company,
Georgia-Pacific Corporation and Weyerhaeuser Company.
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. The significant uncertainties and contingencies associated with the
Weyerhaeuser Offer, including conditions which are (a) in the sole
discretion of Weyerhaeuser, (b) subject to external events not directly
related to the Company or (c) not within the control of the Company or
Weyerhaeuser;
. The Board's concern about whether the transaction as proposed by
Weyerhaeuser could be completed in a timely manner in light of certain
conditions contained in the Weyerhaeuser Offer relating to antitrust
issues that arise from the transaction and that are currently under
investigation by the Antitrust Division of the United States Department
of Justice and the Oregon Attorney General's Office; in that regard, the
Board noted that the Weyerhaeuser Offer is conditioned on there not
being threatened, instituted or pending any action by any domestic or
foreign governmental entity or by any other person seeking to impose
limitations upon the ability of the Purchaser, Weyerhaeuser or any
affiliate of Weyerhaeuser effectively to exercise full rights of
ownership of the Willamette Common Stock;
. The opinion of Goldman Sachs, financial advisor to the Company, after
reviewing with the Board many of the factors referred to herein and
other financial criteria used in assessing an offer, that, as of
December 11, 2000, the Offer Price is inadequate, from a financial point
of view, to the Company's shareholders (other than Weyerhaeuser and its
affiliates); and
. The Board of Directors' and management's commitment to protecting the
best interests of the shareholders of the Company and enhancing the
long-term value of the Company.
In light of the above factors, Willamette's Board of Directors unanimously
concluded, among other things, that the Weyerhaeuser Offer is inadequate and
not in the best interests of the Company, its shareholders and other
constituencies. ACCORDINGLY, THE BOARD UNANIMOUSLY RECOMMENDS THAT ALL HOLDERS
OF WILLAMETTE COMMON STOCK REJECT THE WEYERHAEUSER OFFER AND NOT TENDER THEIR
SHARES TO THE PURCHASER.
The foregoing discussion of the information and factors considered by the
Board is not intended to be exhaustive but includes all material factors
considered by the Board. In reaching its determination to reject the
Weyerhaeuser Offer, the Board did not assign any relative or specific weights
to the foregoing factors, and individual directors may have given differing
weights to different factors. Throughout its deliberations, the Board received
the advice of its legal and financial advisors.
Item 4(b) is hereby amended by adding the following paragraphs at the end
thereof:
On December 12, 2000, Willamette's Board of Directors sent a letter to
Weyerhaeuser's Board of Directors describing the Board's unanimous rejection of
the Weyerhaeuser Offer. The text of the letter is included in the press release
attached to the Amendment to the Schedule 14D-9 filed with the Commission as
Exhibit (a)(2)(ii).
ITEM 8. ADDITIONAL INFORMATION.
Item 8(a) is hereby amended by adding the following paragraph at the end
thereof:
On December 11, 2000, Weyerhaeuser commenced litigation against Willamette
in the Oregon Circuit Court for Multnomah County alleging that the Company
failed to provide Weyerhaeuser with materials in response to a demand by
Weyerhaeuser to inspect the Company's shareholder lists, books and records. The
Company believes that it has provided Weyerhaeuser with all shareholder
materials required by the relevant Oregon statute and intends to vigorously
contest the Weyerhaeuser lawsuit.
Item 8(b) is hereby amended by adding the following paragraph at the end
thereof:
On December 11, 2000, Willamette's Board of Directors approved certain
amendments to the Rights Agreement to provide, among other things, (i) that the
Rights may only be redeemed by the Board prior to such
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time as any person becomes an Acquiring Person and (ii) that from and after
such time as any person becomes an Acquiring Person, the Rights Agreement may
not be amended in any manner which would adversely affect the interests of the
holders of Rights. The amendments to the Rights Agreement are intended to
prevent a hostile acquiror from attempting to coerce the Board or shareholders
to act on an acquisition precipitously and without full consideration of an
offer, alternatives to such offer and the effects either may have on the
shareholders and other constituencies which the Board may consider under Oregon
law. The Board will continue to have flexibility to redeem the Rights or amend
the Rights Agreement at any time prior to such time as any person becomes an
Acquiring Person. A copy of Amendment No. 1 to the Rights Agreement is attached
to the Amendment to the Schedule 14D-9 filed with the Commission as Exhibit
(a)(5)(i).
A new paragraph (g) is hereby added to Item 8 as follows:
(g) Bylaw amendments.
On December 11, 2000, Willamette's Board of Directors approved certain
amendments to the Company's bylaws to, among other things, (i) provide that the
annual meeting of shareholders will be held on such date and at such time as
may be designated by the Board, (ii) require not more than one hundred and
twenty-day and not less than ninety-day advance notice of shareholder proposals
at annual meetings, and (iii) require a shareholder making a nomination of a
person for election to the Board at an annual meeting or proposing business to
be considered by the shareholders at an annual or special meeting to furnish
certain information not presently required by the Company's bylaws. The bylaw
amendments are intended to serve the purpose of reasonably regulating
shareholder meetings and assuring that the shareholders and the Board will have
a reasonable opportunity to thoughtfully consider shareholder proposals and
director nominations and to allow for full information to be distributed to
shareholders. A copy of the bylaws of the Company as amended through December
11, 2000 is attached to the Amendment to the Schedule 14D-9 filed with the
Commission as Exhibit (a)(5)(ii).
A new paragraph (h) is hereby added to Item 8 as follows:
(h) Stock Purchase Plan amendments.
On December 11, 2000, Willamette's Board of Directors approved certain
amendments to the Stock Purchase Plan made effective as of December 31, 1997,
by and between the Company and Wells Fargo Bank, N.A., as Trustee (as amended,
the "Stock Purchase Plan") to, among other things, (i) authorize plan
participants to determine whether shares of Willamette Common Stock allocated
to their accounts under the Stock Purchase Plan should be tendered in response
to a tender offer and (ii) provide that the Trustee will exercise discretion as
to whether or not unallocated shares in the Stock Purchase Plan should be
tendered in response to a tender offer.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit (a)(2)(i) Form of Letter to Shareholders of the Company, dated
December 12, 2000.*
(a)(2)(ii) Form of Press Release, dated December 12, 2000.
(a)(5)(i) Amendment No. 1 to Rights Agreement dated as of February 25, 2000
by and between Willamette Industries, Inc. and Mellon Investor Services LLC
(f/k/a ChaseMellon Shareholder Services, L.L.C).
(a)(5)(ii) Bylaws of the Company as amended through December 11, 2000.
This document and the exhibits attached hereto may contain certain
statements that are considered "forward-looking statements" under the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995 (the
"PSLRA"). Although the Company believes the expectations reflected in such
forward-looking
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* Included in copies mailed to shareholders.
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statements are based on reasonable assumptions, it can give no assurance that
its expectations will be realized. There can be no assurance that actual
results will not differ materially due to various factors, many of which are
beyond the control of the Company, including, but not limited to, the effect of
general economic conditions; the level of new housing starts and remodeling
activity; the availability and terms of financing for construction; competitive
factors, including price pressures; the cost and availability of wood fiber;
the effect of natural disasters on Willamette's timberlands; construction
delays; risk of nonperformance by third parties; the impact of environmental
regulations and other costs associated with complying with such regulations,
and other risks described from time to time in the Company's reports with the
Commission including quarterly reports on Form 10-Q, annual reports on Form 10-
K and reports on Form 8-K. The safe harbor provisions of the PSLRA with respect
to forward-looking statements are not available to statements made in
connection with a tender offer.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
WILLAMETTE INDUSTRIES, INC.
/s/ DUANE C. MCDOUGALL
By : ________________________________
Name: Duane C. McDougall
Title: President and Chief
Executive Officer
Dated: December 12, 2000
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EXHIBIT INDEX
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<CAPTION>
Exhibit
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(a)(2)(i) Form of Letter to Shareholders of the Company, dated December 12,
2000.*
(a)(2)(ii) Form of Press Release, dated December 12, 2000.
(a)(5)(i) Amendment No. 1 to Rights Agreement dated as of February 25, 2000
by and between Willamette Industries, Inc. and Mellon Investor
Services LLC (f/k/a ChaseMellon Shareholder Services, L.L.C).
(a)(5)(ii) Bylaws of the Company as amended through December 11, 2000.
</TABLE>
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* Included in copies mailed to shareholders.
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