Company News: Longview Fibre to be sold for $1.6 billion

Brookfield Asset Management Inc. plans to buy Longview Fibre Co. for about $1.6 billion, adding nearly 600,000 acres of private tree farms and more than a dozen forest products plants to the Toronto firm’s holdings.

Brookfield would purchase Longview Fibre for $24.75 per share in a deal valued at $1.63 billion. Brookfield also would assume about $518 million in debt, the companies said Monday.

Longview Fibre’s private timberlands, some 588,000 acres in Washington state and Oregon, were the primary lure for the Canadian outfit, which now owns or manages 2 million acres of timber in North America and Brazil.

There were no immediate plans to close or downsize Longview Fibre’s pulp and paper mill in Longview or its 15 corrugated cardboard plants in 12 states, Brookfield managing partner Sam Pollock said.

The offer from Brookfield represents an 18 percent premium over Longview’s share price at Friday’s market close. The investment firm presently holds more than 3 million shares of Longview Fibre, about 4.6 percent of the outstanding shares.

Brookfield plans to split Longview Fibre’s timber and paper-products businesses into separate entities, Pollock said. The land produces mostly Douglas fir and hemlock, which is sold in the U.S. and other countries.

“Boeing Co. CEO Jim McNerney said Tuesday he is satisfied with President Bush’s newly unveiled budget, saying proposed spending on defense is at least as good as the nation’s second-largest military contractor expected and maybe better.

“So far, so good,” McNerney said at an investor conference in New York, noting that the proposal has a long way to go before becoming law.

Chicago-based Boeing and Lockheed Martin Corp., the No. 1 defense contractor, both stand to benefit from continued heavy military spending by the Bush administration in the fiscal year beginning Oct. 1. The $2.9 trillion budget released Monday calls for a core Defense Department budget of $481.4 billion, up about 4 percent from last year’s projected level, along with a $141.7 billion supplemental request.

“Cisco Systems Inc.’s second-quarter profit surged nearly 40 percent as the world’s largest maker of networking gear benefited from equipment upgrades to support bandwidth-hogging video downloads.

For the quarter ended Jan. 27, Cisco’s net income was $1.9 billion, or 31 cents per share, compared with $1.4 billion, or 22 cents per share, for the same period last year.