Associated Press

PORTLAND — Weyerhaeuser Chairman Steven Rogel wants his old company back, and he’s going straight to its shareholders to get it.

Rogel is offering Willamette Industries Inc. shareholders $5.4 billion to sell the rival paper and wood products manufacturer to Weyerhaeuser after the Willamette board rejected the same offer just two weeks ago.

Rogel said the unsolicited offer of $48 per share "provides substantial value to Willamette shareholders at a premium well beyond what Willamette could achieve alone, now or later."

Rogel left Portland-based Willamette Industries at the end of 1997 to take over Weyerhaeuser in Federal Way, and he’s been trying to buy Willamette ever since. After repeatedly being rebuffed, he has resorted to a hostile takeover.

Willamette shareholders have until Jan. 4 to decide whether to accept the offer.

Willamette spokeswoman Cathy Dunn said the company would urge shareholders to decline the offer and said she doubted they would do otherwise.

"Last week, the board looked at the $48-a-share proposal and said it was not in the best interest of shareholders and declined," Dunn said. "I don’t know how this offer differs such that it would make them change their minds."

Analysts say the Willamette board appears to be holding out for a better offer.

"Clearly they’re trying to jack up the price," said Linda Lieberman at Bear Stearns in New York.

"But it’s a pretty good starting point," added Steve Chercover at DA Davidson in Portland. "It’s within striking distance of their all-time high" stock price, he said, noting that "most people would accept that Weyerhaeuser probably has a little bit in its back pocket to sweeten it."

The deal would create the nation’s second-largest forest products company, Chercover said, and allow Weyerhaeuser to compete globally with other large paper and wood products companies, many of them formed by mergers.

Copyright ©2000 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.