285 



Pacific Lumber - at a pace that implies 

 cutting at well above tlie company's preta- 

 keover levels. He also offered S200 million 

 of new Pacific Lumber bonds. 



Rarely has an exercise in corporate 

 refinancing stirred up so much resistance. 

 For starters. Pacific Lumber's constant 

 warfare with environmentalists and uncer- 

 tainty over federal timber policy gave 

 many investors pause. The Sierra Qub, 

 the Wilderness Society and others de- 

 nounced the refinancing- and appealed to 

 Congress to block iL Rep. Fortney Stark 

 (D., Calif.) introduced legislation to foil 

 the refinancing: by slapping a 73% excise 

 tax on redwoods cut to pay bonds. 



Mr. Hurwitz scrambled his lobbyists, 

 including former Jimmy Carter aide Stuart 

 Eizenstat, recently nominated by the Qin- 

 ton administration to be the U.S. represen- 

 tative to the European Community, and 

 former California Congressman Dou^ Bo- 

 SCO. They lobbied against Rep. Stark's bill; 

 it still hasn't gotten out of committee. 



Mr. -Hurwitz not only completed his 

 refinancing, saving Maxxam at least S20 

 million a year in interest, but increased the 

 offering to a total of S610 million. And 

 Pacific Lumber paid Maxxam at least S25 

 million in special cash dividends. 



The deal came at a vital time for Mr. 

 Hurwitz because of recent problems at 

 Maxxam, especially diving aluminum 

 prices. Maxxam stock has slipped to S30 a 

 share from a high of $50 in late 1991. Mr. 

 Hurwitz's stake, excluding: preferred 

 shares, is worth about SS4 million today. 

 With Maxxam's new breathing room, 

 many in Wall Street think the conglomer- 

 ate may have a break-up value of SlOO a 

 share if the economy recovers, which 

 would put his equity stake alone at about 

 S2S0 million. 



