Will Weyerhaeuser Buy Louisiana-Pacific?

According to one business analyst, Louisiana-Pacific may be ripe for a takeover... by Weyerhaeuser.

Terry Schumacher of the brokerage firm Black & Co., Portland, Or., published a l2-page report detailing why L-P. which has more mills than wood. may be the perfect target for Weyerhaeuser, which has more wood than mills.

"It's not a common practice. We've never named a buyer," he said. "But Weyerhaeuser is the only very large company in the industry that has a surplus of affordable logs that could be used to feed L-P's mills."

Most of Weyerhaeuser's excess timber is in areas where L-P has mills. in the Northwest and Southeast.

L-P relies on government contracts and open market purchases for almost 75Vo of its timber supply, which will likely result in lower future profits, according to the report.

The dependence makes L-P a "boom,/bust" company, somewhat unstable during lean timber years but very profitable when logs are available.

Weyerhaeuser, on the other hand, has a cushion of its own private timber that provides stability despite market availability.

L-P's Barry Lacter called the scenario "very interesting," but said "there is no real-world activity that supports the takeover claims."

Slow Gains For Wood Panels

The U.S. market for wood panels will climb ZVo yearly to 51.5 billion sq. ft. in the year 2000, forecasts the Freedonia Group.

Gains will be slowed by a downturn in the single-family housing market and intense competition within the industry and from non-wood building materials, which will mainly affect softwood and hardwood plywood and insulation board. Imports will likely satisfy most projected market gains due to continued restrictions on the U.S. timber supply, a reduction in trade barriers (especially with Canada), and an increase in the quality of foreign-made panels.

Opportunities will exist in the rebounding nonresidential building market and healthv residential after- market, with particularly strong gains by OSB (up 9Vo per year) and MDF (+ll%o).

Nearly 70Vo of all wood panel demand will continue to stem from construction applications, especially new residential dwellings. Within this segment, wall sheathing and roofbased markets will be the best opportunities for growth due to competitive advantages over most non-wood alternatives.

Standard Brands Bankruptcy #2

Standard Brands, Torrance, Ca., has filed for bankruptcy for the second time in two years and may liquidate its assets, according to a company spokesman.

The company stated in a Securities and Exchange Commission filing that it needed $4 million by Dec. 3l to repay lenders and cover its expenses.

Standard Brands' cfo Howard Schwarz warned the company would file if it didn't receive financial support from its largest stockholder, Venezuelan-based paint manufacturer Corimon, and attempted to arrange financing with Corimon and various institutions.