There is no short answer to your question. It was a unfortunate sequence of events that lead to the downfall of MB. It was like an accident which also is made up of a sequence of events. Change any one of those events and the results would have been different. MB was in dire financial difficulty in 1996. It was on the brink of failure. Unfortunately the CEO and senior management group at the time did nothing but take a wait and see approach. They thought they would just wait it out until things got better. It had worked in the past and they thought it would work again. But this time was different. MB was faced with poor markets, increased world competition, environmentalist campaigns to name a few obstacles. A new CEO (Tom Stevens) was appointed in 1997 that soon declared the end of clearcutting. He also sold off the Pulp operations in 1998. When the pulp mills where sold off there ended up being a surplus of cash. This cash should have been reinvested to avoid being in a position of shark bait for takeover. Being in a position of corporate shark bait is when a companies asset and cash position are more than what the share value is. Simply buy the shares and you will have gained a profit. In a conference call Tom Stevens was asked about MB now being in a shark bait position and was that money being reinvested to shield the company from takeover. Tom Steven's reply in his words " No one is stupid enough to take over a BC coastal forest company". In 1999 WY took over MB (they called it a merger). In order to survive MB's CEO and senior management group (prior to Stevens) would have had to make some draconian moves. Probably having the courage to sell off the pulp mills anyway or liquidating other major assets. Then putting the balance sheet back in order to avoid any thought of someone taking over MB. The next event in the sequence was the refusal of Stevens to avoid a shark bait position. Whether he wanted to avoid it or not can be debated, we will never know. It has been said the Stevens was put in place by WY to see this plan through. What would throw some cold water on that theory is that when Stevens entered the picture the MB shares where in the $ 16.00 range. By the time WY "merged" they where at $ 27.00. It makes no sense they would have waited that long to pull the trigger on the deal. Even if they wanted to wait to see if things where headed in the right direction they would have moved long before $ 27.00 a share. So two things lead to the downfall 1. The failure of the prior to Stevens CEO / senior management group and 2. Stevens failure to address the shark bait position . If either one of those two events would have a different outcome then WY would have never been in the picture
This is just my opinion. Your mileage may vary.
