Maxxam Silent on Report of Possible Windfall
12/7/98
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Title: Maxxam Silent on Report of Possible Windfall
Source: Reuters
Status: Copyrighted, contact source to reprint
Date: 12/7/98
NEW YORK, Dec 7 (Reuters) - MAXXAM Inc. on Monday
declined comment on a published report that it stands to reap
up to $500 million from a logging deal with California and the
federal government and that the cash may be used to take the
company private.
The financial weekly Barron's reported that the deal
involved the Houston-based company's halting logging in
environmentally sensitive areas of California.
The report said MAXXAM Chief Executive Charles Hurwitz
might use the cash, which equals as much as $48 per MAXXAM
share, to take the company private.
MAXXAM shares were halted because of the Barron's article
and then reopened at $57.125, up $7.75, or 16 percent, making
it one of the top gainers on the American Stock Exchange.
A MAXXAM spokesman declined comment to Reuters on the
Barron's report and said the company had no plans to issue a
press release.
Investors in MAXXAM are betting that Hurwitz wants to take
the company private as cheaply as possible. They want to
generate as a high a price tag as possible.
The stock fell about 29 percent between late August and
early October, to a low of $45.81. It closed Friday at $49.375.
MAXXAM owns Pacific Lumber Co., which has been at the
center of a bitter battle over the future of California's
dwindling ancient redwood groves. The state has accused Pacific
Lumber of continued violations of its forest practice rules.
Barron's said MAXXAM will receive the cash from the
settlement in the next few months.
California and the federal government have passed the
authorization bills, but several conditions must still be met
by the end of February for the deal to be completed, according
to the report. The issues include final development and
approval of a habitat conservation plan and a state land
management plan, it said.
In addition to its logging operations, MAXXAM indirectly
and directly holds 63 percent of Kaiser Aluminum Co. ,
one of nation's largest aluminum producers.
MAXXAM's real estate operations include land holdings and
masterplan communities, mostly in the U.S. Southwest and in
Puerto Rico, the company spokesman said.
((--John Hanley, New York Newsroom +212 859 1713))