G-P Throws Wrinkle Into Drama
* Shareholder rebellion. Reuters has reported that hedge fund manager P. Schoenfeld Asset Management, which reportedly owns just under 300,000 Willamette shares, has threatened to lead a shareholder revolt if the company does not attempt to sell itself to the highest bidder. In a letter to Willamette, Peter Schoenfeld—hedge fund manager and CEO—promised to nominate three directors for Willamette's board at the company's next annual meeting if it does not abide by the wishes of the shareholder majority.
The news agency also reported that a group of Willamette shareholders would seek legal intervention to coerce the company into accepting the Weyerhaeuser takeover attempt. Should the deal fall through, the group will seek $30 million in damages, the group's law firm, Milberg Weiss Bershad Hynes & Lerach, said in a statement.
Shareholder attorney Darren Robbins told Reuters he believes the proposed acquisition of Georgia-Pacific's building products unit is "troublesome at best."
"Every large shareholder that I'm aware of is vociferously opposed to the transaction," Robbins was quoted as saying. "The assets come with them the potential for massive asbestos liability, so most clients, including mine, are perplexed."
* Board of directors coup. Last year, Weyerhaeuser was able to install three members on Willamette's board, and a repeat performance at this year's annual meeting would give Weyerhaeuser six of the nine seats on the board—not to mention the fast track to a deal.
It seems unlikely a deal between G-P and Willamette could take place before that time, especially if the latter faces considerable opposition from angry shareholders.