Weyerhaeuser Reveals $7 Billion Cash Offer For Willamette

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Weyerhaeuser

(WY) - Get Report

says it offered last week to buy paper products rival

Willamette

(WLL) - Get Report

in a $7 billion cash deal that includes the assumption of $1.7 billion of Willamette's debt.

Willamette's board met Nov. 9, but told Weyerhaeuser it did not act on the proposal.

Weyerhaeuser sent a letter to the Willamette on Nov. 6, saying it would pay $48 a share, or $5.3 billion, for outstanding shares. The offer represents a 38% premium over Willamette's closing price Friday, and a premium of about 63% over Willamette's average closing price in the last 60 days.

In his letter to Willamette CEO Duane McDougall, Weyerhaeuser's CEO Steven Rogel said that since he first proposed a merger two years, he's believed the combination would result in the "premier" forest and paper products company. Rogel went on to say a merger would result in annual cost savings of $300 million and that Weyerhaeuser's board is confident the proposal won't raise antitrust issues.