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Speculation Persists On MB"s Future 

Why the continuing speculation in the business press that MB is to be sold off in pieces? Why would some people like to see that happen? As MB public affairs manager Scott Alexander and others see it, the heat is in large part a case of too much excess monev in the investment markets. It isn't, he stresses derived from "any policv changes within MacMillan Bloedel." 

Alexander explains that there is a great deal of money available in investment houses and mutual funds.  Some of this money is destined for the forest industry, among others. As he sees the situation, the continuing trend to global investment means money moves more easily; investors look to Europe, Scandinavia and the US where they see predominantly large integrated forest companies in which to invest. However, they often have money left over that they still want to invest in the forest industry while allowing them to "play the market." 

The integrated companies traditionally have a slightly flatter profile of earnings and losses than do the pure play companies - pure pulp, pure paper or pure lumber companies. These investors see the pure plays as suitable to their needs. 

MB, a relatively smaller integrated company in global terms, could be a pure play if it were in one business or, better still, if it were broken up into three - paper, building materials and packaging. 

Some of those advocating the break-up of MB want to see a more fluid stock,  i.e.. the upward potential that comes with the pure plays. Others, a significant number of existing shareholders, perceive a significant potential for immediate capital gain if the company is broken up. 

"That is what has changed in the last 18 months and you see it manifesting itself in the papers with the people who are speculating on what we should or should not be doing," says Alexander. 

He adds,  "As a company you can't (act on) the interests of just one group "You've got to balance every-one's interests." 


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