Franklin Pressures Weyerhaeuser
Franklin Resources Inc. spent $1.15 billion for a 7.1% stake in Weyerhaeuser Inc., the world’s biggest lumber producer, and urged the company to make changes to boost the stock.
San Mateo, Calif.-based Franklin Resources, the largest publicly held U.S. mutual fund company, said in a regulatory filing Friday that it bought 17 million shares from March 18 to Thursday through its Franklin Mutual Advisers unit.
Weyerhaeuser, based in Federal Way, Wash., is undervalued, and “steps can and should be taken†by the company “to increase the market valuation,†Franklin said in the filing with the Securities and Exchange Commission. Franklin said it was discussing alternatives with Weyerhaeuser for “realizing the unrecognized value.â€
“Weyerhaeuser is a very fine company with excellent timber assets, and there is more they can do to surface value,†said David Winters, president of Franklin Mutual Advisers. “We’re long-term investors.â€
He declined to say what strategies Franklin discussed with Weyerhaeuser managers.
Weyerhaeuser shares rose $3.17 to $68.61 on the New York Stock Exchange. Franklin Resources shares climbed $1.69 to $68.68, also on the NYSE.
Weyerhaeuser said in a separate filing that it “welcomes the perspective of its shareholders and is open to examining potential value-creating strategies.â€
“Weyerhaeuser believes it has the best assets in the industry and continually examines ways to optimize returns on its businesses,†it said.
Weyerhaeuser spokesman Bruce Amundson declined to comment further.
