<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Form Pursuant to Section 13 or 15 (d) of
The Securities Exchange Act of 1934
April 25, 2000
-------------------------------------------------------
Date of Report (Date of Earliest Event Reported)
INTERNATIONAL PAPER COMPANY
--------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
NEW YORK 1-3157 13-0872805
- -------------- ----- ----------------------
(State of (Commission (IRS Employer
Incorporation) File) Identification Number)
TWO MANHATTANVILLE ROAD, PURCHASE, NY 10577
-------------------------------------------
(Address of Principal executive offices)
914-397-1500
---------------
(Telephone No.)
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
N/A
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
N/A
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
N/A
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
N/A
ITEM 5. OTHER EVENTS
The Company announced in a press release that it has offered to
purchase all outstanding shares of Champion International (NYSE:CHA) in
a cash and stock transaction worth an estimated $6.2 billion. The
Company is offering $64 per share for Champion shares, an offer
representing more than a 20% premium over the implied value of the
UPM-Kymmene proposal. The total purchase price would be paid with $43
in cash and $21 in International Paper stock. In addition,
International Paper would assume approximately $2.3 billion of
Champion's net debt.
Also announced was a plan to sell more than $3 billion in assets by the
end of 2001 as part of the Company's increased focus on its core
businesses.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
N/A
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: N/A
<PAGE>
(b) Pro Forma Financial Information: N/A
(c) Exhibits
(99) Press Release dated April 25, 2000, including the text of
a letter to Champion Chairman and CEO, Richard Olson, from
John Dillon, Chairman and CEO of International Paper.
ITEM 8. CHANGES IN FISCAL YEAR
N/A
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERNATIONAL PAPER COMPANY
(Registrant)
Date: April 25, 2000 /S/ CAROL M. SAMALIN
Purchase, NY ----------------------------------------------
Carol M. Samalin
Assistant Secretary
<PAGE>
[Letterhead for International Paper]
NEWS RELEASE
MEDIA CONTACT: James Lee, 914-397-1565
Jack Cox, 914-397-1952
ANALYST CONTACTS: Carol Tutundgy, 914-397-1632
Rochelle Weitzner, 914-397-1623
INTERNATIONAL PAPER MAKES OFFER FOR CHAMPION: ANNOUNCES $3 BILLION ASSET SALE
Monday, April 24, 2000
Purchase, New York -- International Paper (NYSE: IP) today announced that it has
offered to purchase all outstanding shares of Champion International (NYSE: CHA)
in a cash and stock transaction worth an estimated $6.2 billion. In a letter to
Champion Chairman and CEO Richard Olson, IP Chairman and CEO John Dillon said
the company's offer is clearly superior to the previously announced all stock
deal between Champion and UPM-Kymmene.
International Paper is offering $64 per share for Champion shares, which Monday
closed at just under $40. The total purchase price would be paid with $43 in
cash, and $21 in IP stock. The implied value of UPM-Kymmene's all stock offer
would be $52.74 per Champion share, based on Monday's closing price on the NYSE
for UPM-Kymmene's ADRs. In addition, IP would assume approximately $2.3 billion
of Champion's net debt.
Based on Monday's closing prices, the International Paper offer represents more
than a 20% premium over the implied value of the UPM-Kymmene proposal and nearly
25% over Champion's closing share price.
International Paper's offer is not subject to any financing conditions or to
pooling-of-interests accounting treatment and does not require an IP shareholder
vote. The offer is backed by fully committed financing. IP further announced
that it is prepared to enter into discussions with Champion management as soon
as the Champion board has authorized those discussions, and that it is convinced
that the transaction could be concluded quickly. The transaction is subject to
regulatory approvals, which are not expected to delay completion of the
transaction. IP expects to make a Hart-Scott-Rodino filing in connection with
the proposed transaction within the next few days.
"Our cash and stock offer is far more attractive to Champion shareholders," said
John Dillon. " It not only represents a significant premium over the UPM-Kymmene
offer, but also provides Champion shareholders certainty of value and much more
liquidity."
"A merger with Champion affords us the opportunity to significantly improve
profitability by strengthening our core businesses," noted Dillon. "Champion
will be an important addition to our Printing and Communications Papers
business, particularly in the coated papers and uncoated
<PAGE>
International Paper, Continued.
Page 2
freesheet segments, and will enhance our timber and building materials
businesses. There is no question in my mind that we will be a stronger company."
"We have long said that our strategy is to serve the global marketplace from
platforms around the world, something we've done successfully and profitably,"
added Dillon. "Champion also fits well with this strategy, since it will greatly
expand our Latin American base, and make us a party to distribution agreements
with Asian and European producers."
The merger is expected to result in $425 million in annual cost savings as a
result of integrating manufacturing operations, reductions in duplicate overhead
costs and improved purchasing efficiencies, principally in North America. In
addition, the combined company will be able to reduce capital expenditures below
the amount spent as separate entities. The merger will be additive to
International Paper's earnings in the first full year after completion of the
deal and over the life of the cycle.
International Paper also announced plans to sell more than $3 billion in assets
by the end of 2001 as part of the company's increased focus on its core
businesses.
"The assets that will be sold are not strategic to International Paper's core
businesses of printing and communications papers, consumer and industrial
packaging, distribution, timberlands and building materials. The acquisition of
Champion and the divestiture program that we are announcing will significantly
increase the focus of IP by redeploying capital into our core businesses,"
Dillon commented.
"The bottom line is that this transaction creates significant value for
International Paper shareowners, and is a better deal for Champion shareholders
than the UPM-Kymmene proposal, " Dillon concluded.
International Paper (www.internationalpaper.com) is the world's largest paper
and forest products company. Businesses include printing papers, packaging,
building materials, chemical products and distribution. As the largest private
landowner in the U.S., the company manages its forest under the principles of
the Sustainable Forestry Initiative (SFISM) program, a system that ensures the
perpetual growing and harvesting of trees while protecting wildlife, plants,
soil, air and water quality. Headquartered in the United States at Purchase,
N.Y., International Paper has operations in nearly 50 countries, employs nearly
100,000 people and exports its products to more than 130 nations.
###
Statements in this press release that are not historical are forward-looking
statements, which are subject to risks and uncertainties that could cause actual
results to differ materially. The expected increases in profitability and
reduction in costs are subject to risks and uncertainties, including general
economic conditions, fluctuation in supply and demand, operating rates and
competitive pricing pressures.
<PAGE>
International Paper, Continued.
Page 3
Below is the text of the letter to Champion Chairman and CEO Richard Olson:
April 24, 2000
Mr. Richard E. Olson
Chairman & CEO
Champion International Corporation
One Champion Plaza
Stamford, CT. 06921
Dear Dick:
Our board of directors has authorized me to convey to you and to the
board of directors of Champion International Corporation our offer to acquire
all of Champion shares for a combination of cash and International Paper common
stock at a value of $64 per share, of which $43 is cash and $21 is International
Paper common stock. Based on today's closing price of $39 15/16 for
International Paper common stock, the exchange ratio represented by the stock
portion of our offer is 0.526. In order to protect the value of our offer for
Champion shareholders, we would maintain the value of the stock component down
to a price of $36 per International Paper share.
Our two companies, while competitors, are headquartered only a few
miles from each other, and many of us have enjoyed close friendships with
Champion employees at all levels over many years. We are confident that our
corporate "cultures" are similar, and that an assimilation of the two companies
would be relatively easy. We believe that our recent experience with Union Camp
and Federal Paperboard, both companies which you knew well, demonstrates our
ability to combine the best of both companies into an even better company. In
addition, a merger between International Paper and Champion would permit the
combined company to realize many efficiencies and create an even stronger
competitor in an industry which must now compete on a global basis.
We are of course aware that Champion is currently a party to a merger
agreement with UPM-Kymmene Corporation. Based on today's closing price of UPM-
Kymmene ADRs, under that agreement Champion shareholders would receive
UPM-Kymmene shares with a value of $52.735. We believe it is clear that our
proposal represents a superior offer in a number of important respects. It
represents a 21.4% premium over the implied value of the UPM- Kymmene offer
today; it is largely in cash; and, because of our inclusion in the Dow Jones
Industrial Average as well as our average daily trading volume on the New York
Stock Exchange, the International Paper stock we are offering is far more liquid
than ADRs or shares traded on the Helsinki Exchange.
In addition, our proposal is not subject to a due diligence review of
your business, to pooling-of-interests accounting treatment, or to a vote of the
International Paper shareholders. We are confident that there are no impediments
to our offer from an antitrust or other standpoint. Nonetheless, International
Paper will give Champion International the same undertaking as did UPM Kymmene
to take whatever steps are required to obtain regulatory approval. Furthermore,
our lawyers have a draft agreement containing substantially similar conditions,
representations and warranties as in the UPM-Kymmene agreement. We have fully
committed financing for our offer. We will be making our Hart-Scott-Rodino
filing within a day or two. In short, we are convinced we can consummate the
transaction quickly.
<PAGE>
International Paper, Continued.
Page 4
Dick, I think you already know that our board of directors and I have a
great deal of respect for you and for the Champion board. We would have much
preferred to discuss this matter with you directly, but recognized that you were
bound by the strict terms of your merger agreement. However, given developments
in the market subsequent to the UPM-Kymmene proposal, what is contained in this
letter is clearly a superior proposal from a financial point of view, and we are
certain that the Champion board of directors, as well as the Champion
shareholders, will recognize that fact.
I want to assure you that we view a merger with Champion as an
important strategic objective for International Paper and that we are committed
to bringing the combination to a successful conclusion. We understand that,
after UPM-Kymmene has been informed of our proposal, which we intend to make
public, the Champion board can authorize management to enter into discussions
with us, and we would respectfully request that the Champion board make that
determination as soon as possible. I look forward to meeting with you at the
earliest opportunity.
Sincerely,
John
