Subject category:
Finance, Accounting and Control
Originally published in:
2002
Version: 03.04
Length: 14 pages
Data source: Published sources
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Abstract
In the fall of 2000, Weyerhaeuser Company, one of the world''s largest integrated timber companies, made an offer to purchase Willamette Industries, also a large integrated timber company, for $48 per share in cash. After three days of consideration, the board of Willamette rejected Weyerhaeuser''s offer citing that the price, valued at $5.3 billion, did not accurately reflect the value of the company or its future growth potential. The immediate rejection, which many in the industry expected, placed Weyerhaeuser in the position of deciding whether or not to initiate a hostile takeover attempt. After two weeks of consideration, Weyerhaeuser announced that it would launch a hostile takeover of the company settling on a price of $50 per share. For months, Willamette considered the offer with several rejections along the way and an announcement that it would purchase roughly ten million shares in an ongoing share repurchase programme that would continue depending on stock price. Finally, on January 2, 2002, Weyerhaeuser raised its bid to $55 per share and stated that it was as high as it could go. Two days later, Willamette Industries announced that the price was inadequate and that it was terminating its discussions regarding Weyerhaeuser''s acquisition offers.
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Abstract
In the fall of 2000, Weyerhaeuser Company, one of the world''s largest integrated timber companies, made an offer to purchase Willamette Industries, also a large integrated timber company, for $48 per share in cash. After three days of consideration, the board of Willamette rejected Weyerhaeuser''s offer citing that the price, valued at $5.3 billion, did not accurately reflect the value of the company or its future growth potential. The immediate rejection, which many in the industry expected, placed Weyerhaeuser in the position of deciding whether or not to initiate a hostile takeover attempt. After two weeks of consideration, Weyerhaeuser announced that it would launch a hostile takeover of the company settling on a price of $50 per share. For months, Willamette considered the offer with several rejections along the way and an announcement that it would purchase roughly ten million shares in an ongoing share repurchase programme that would continue depending on stock price. Finally, on January 2, 2002, Weyerhaeuser raised its bid to $55 per share and stated that it was as high as it could go. Two days later, Willamette Industries announced that the price was inadequate and that it was terminating its discussions regarding Weyerhaeuser''s acquisition offers.