Louisiana-Pacific Sells Assets
PORTLAND, Ore. (AP) _ After revamping its management and settling a lawsuit over defective house siding, Louisiana-Pacific Corp. announced Monday it would sell $1 billion in assets to focus on its main building products business.
For sale are about 300,000 acres of California timberland and related lumber businesses, two of three distribution centers in California and a pulp mill in that state.
``We’re going to move to become the premier supplier of home building products,″ chairman Mark Suwyn said.
The sales were announced with a disappointing third-quarter loss of $18 million, or 16 cents a share, compared with earnings of $11.2 million, or 11 cents a share, a year ago.
The company took a $210 million charge for the quarter to write down some of the assets it plans to sell, and to increase reserves to cover the cost of a $425 million class-action settlement with homeowners to replace defective siding.
Last December, a federal judge also approved a $65 million settlement for shareholders who claimed the company and four top executives violated securities laws by failing to disclose siding defects and exposing Louisiana-Pacific to millions of dollars in liability.
``Our customers have put that behind them,″ Suwyn said. ``And I think that across the country, it’s pretty much been put behind us, at least in the finance community.″
Analysts said Louisiana-Pacific had discussed the sales with investors and financial consultants before making the announcement Monday as the stock market took a steep plunge. The company’s stock closed at $21.25, down $1.62 1/2 per share, or about 7 percent, on the New York Stock Exchange.
``It really didn’t catch us by surprise because it’s something that has been long overdue,″ said Doug Johanson, an analyst with IMS Capital Management in Clackamas, Ore.
Analysts had counted on Suwyn, who replaced Harry Merlo as chairman after Merlo was ousted two years ago, to either sell off assets or seek a buyer for a company long considered undervalued, despite its legal problems.
``They’ve got some good timberlands,″ Johanson said. ``One of the ways to get value out of them in the near-term is just to sell them, rather than wait for an upturn in the market.″
Suwyn said he expects to reduce the Louisiana-Pacific work force by about 3,500 employees over the next two years as sales are completed, but he predicted few layoffs.
The company employs about 13,000 people at manufacturing facilities throughout the United States and in Canada and Ireland.
Louisiana-Pacific, based in Portland, is the largest U.S. manufacturer of oriented strand board, a plywood substitute made from wood chips that are glued and pressed together. The board is used as subflooring, sheathing and siding on houses.
The company also makes specialty wood products, such as beams and laminated lumber.