Willamette Loses Election, Continues Fight

Willamette Industries will continue battling a hostile $5.5 billion takeover bid by Weyerhaeuser Co. even after three dissident directors won seats on the Willamette board.

Willamette argues that although Weyerhaeuser-friendly nominees narrowly won three seats on the Willamette board, since neither side garnered a majority of outstanding shares, there is insufficient support for Weyerhaeuser's current offer of 950 per share.

In the vote count certified by the independent inspectors, three Weyerhaeuser nominees, Thomas M. Luthy, Robert C. Lane and Evelyn Cruz Sroufe, received votes totaling 49.16 million shares, or 44.857o of the total shares outstanding. Willamette nominees Kenneth W. Hergenhan, Duane C. McDougall and Robert M. Smelick received votes totaling 46.91 million shares, or 42.80Va of all shares outstanding.

Shareholders also voted to reject two proposals, on declassification of the board and on the comoosition of the company's compensation committee.

"We're going to operate as business as usual," vowed Willamette president and c.e.o. McDougall.

Payless Gashways Closing 43

Payless Cashways is closing another 43 stores and laying off about 1,500 more employees.

The liquidations will bring the retailer's total store closures this year to 90 and reduce its units still operating to fewer than 70.

The chain also plans to eliminate 145 positions at its Kansas City, Mo., headquarters and other regional administrative offices.

The retailer must begin going-outof-business sales at the locations no later than Aug. I and conclude them by Oct. 15, to comply with a ratification agreement

"Unless the board changes its vote from the way it has voted three or four times in the past. we're not trying to sell this company, and even if we were, $50 is not the right place to start."

Swindells said the burden rests with Weyerhaeuser either to "make a real offer or drop its hostile bid."

Weyerhaeuser chairman and c.e.o. Steven Rogel countered, "The outcome of the election provides clear direction to Willamette," said Weyerhaeuser. It is time for Weyerhaeuser and Willamette to sit down together and accomplish the objectives of Willamette's shareholders-a prompt, negotiated transaction with Weyerhaeuser to create the premier forest products company headquartered in the Pacific Northwest."

Although Weyerhaeuser's current tender offer is set to expire Aug. 15, the company already has extended the deadline several times. Weyerhaeuser says that if Willamette's new board continues to resist a sale. it would wait and wage another proxy battle next year, when it could win an additional three seats and gain control of the comnanv's nine-member board.