Weyerhaeuser claims Willamette by proxy

Associated Press

PORTLAND, Ore. – Weyerhaeuser Co. said Thursday it appears to have gained a toehold on the board of Willamette Industries Inc., but the rival timber company said the shareholder vote was too close to call.

In a showdown between two of the largest timber companies in the nation, shareholders of Willamette Industries cast votes Thursday that could decide whether Weyerhaeuser gives up its hostile takeover bid of Willamette.

Most of the voting has been done by proxy over the past few weeks, but some shareholders waited for this week’s meeting of Willamette shareholders.

Inside the Portland Art Museum, Willamette shareholders cast ballots for three of nine seats on the Willamette board. They chose between a Willamette slate of sitting company loyalists and a slate put up by Weyerhaeuser.

After the close of voting on Thursday, Weyerhaeuser issued a statement saying “based on the number of proxies it has submitted” to an independent voting service, “it appears the three Weyerhaeuser director nominees … following certification of the annual meeting results … will be elected to the board of directors of the Willamette Industries.”

But Willamette said the vote was too close to call. “We don’t have information to support that,” said Jackie Lang, spokeswoman for Willamette.

The official results of the voting won’t be known for two to three weeks, said William Swindells, chairman of the Willamette board.

Portland-based Willamette is the seventh-largest forest products company in America, while Federal Way-based Weyerhaeuser is No. 3. Both were founded about a century ago, and each has come to dominate the timber industry in their home state.

But for the first time, Weyerhaeuser is led by a chairman chosen from outside the company – in fact, he arrived from the enemy camp in Portland.

Steve Rogel left the corporate helm at Willamette for Weyerhaeuser late in 1997, and he has been trying to buy his old company ever since, saying the best way to compete in the globalized economy of the new century is to get bigger.

He has encountered nothing but stubborn resistance, finally declaring war last November by announcing a hostile takeover attempt.

After first offering $48 a share, Weyerhaeuser upped the ante to $50 a share recently – a total of $5.5 billion in cash, along with the assumption of $1.7 billion in debt. Willamette’s board of directors told shareholders to reject the offer.

Many Willamette workers don’t want to see the Portland-based company swallowed up by the larger Weyerhaeuser.

Gary VanCleave of Eagle Creek, a network engineer with Willamette who stood outside the shareholders’ meeting protesting the hostile bid, said Willamette has a tradition of treating its employees well.

“It’s a large company with a small company feel to it. I don’t think we would have that with a larger company such as Weyerhaeuser,” he said.