Logs are loaded to a waiting truck at a Menasha Forest Products logging site in July 2003. The North Bend-based timber company is exploring options for its future that might include selling the company. World File Photo

NORTH BEND - Menasha Forest Products Corp., which has been a presence in the Bay Area for more than 100 years and which owns about 138,000 acres of timberland in Oregon and Washington, is exploring selling the logging company.

But, don't fall over yet.

According to Menasha Vice President Scott Starkey, the action wouldn't leave the company's 50 employees high and dry, or local mills on the hunt for another log supplier.

“It does not mean it will be sold at all,” Starkey said during an interview late last week. “It's an option that is being considered by the company.”

And even if the company was sold, Starkey said it's likely Menasha would be purchased and “just run as it is.”

“We have no reason to think anything is going to change at this time,” Starkey said.

He characterized the move as an exercise in fiscal prudence prompted, in part, by the company's reaction to the passage of a federal law known as the Sarbanes-Oxley Act. The 2002 law cracked down on major corporations in the wake of accounting and investment scandals at the Enron Corporation and MCI WorldCom. As a result, Starkey said, companies are “extremely conscious” of doing what's best for shareholders.

In short, he said, if a sale would net more lucrative dividend checks for its 170 shareholders, why not check into it?

“If the board did not make that option available to the shareholders, they would not be doing their job,” Starkey said. “It's what the board is obligated to do.”

Along with the option of “an outright sale of all company stock,” Starkey said, Menasha's board of directors also is exploring other programs of aggressive growth and expansion.

Menasha officials met last Wednesday with visiting representatives from one of the world's leading investment banks, Goldman Sachs, who would help oversee a complicated transaction, Starkey said.

Ultimately, whether Menasha chooses to sell is up to a vote of the company's shareholders, not the board of directors. An announcement about the path the company intends to take isn't expected for several months, Starkey said.

Along with the enactment of Sarbanes-Oxley, also known as the Public Company Accounting Reform and Investor Protection Act, Starkey said the board of directors decided to act due to a trend in investment strategies. Some organizations are investing in timber investment management organizations, or TIMOs, he said.

“It's just recently been discovered - in the last eight to 10 years - that Wall Street considers holding timberlands as a good long-term investment,” Starkey said.

TIMOs gather money from investors, acquire timberlands, and manage it for the investors, he said. According to the Web site of The Campbell Group, a TIMO headquartered in Portland, in July, the Campbell Group acquired 87,000 acres of timber from International Paper in North Carolina and will manage the property for investors. In addition, last year the Campbell Group proposed to acquire Longview Fibre Company, based in Longview, Wash., and which owns 585,000 acres in Washington and Oregon, for $26 per share, 53 percent more than Longview's closing share price on March 15, 2005.

Since TIMOs are an increasingly popular long-term investment strategy, Starkey said now is a practical time for Menasha to look into it.

“If you don't explore the option when it's viable, then the board wouldn't be doing the job for shareholders,” Starkey said. “That is the only reason for the timing of this.”

If Menasha does choose to sell, the transaction would include the sale of assets, land, employment obligations, debt as well as the divisions of the company including the Menasha Log Co., Menasha Forest Management Services, Menasha Development Corp. and Skookum Reforestation near Eugene, Starkey said.

He declined to disclose which - or even if - Menasha is dealing with any companies regarding a sale.

“I can tell you that the likely people interested are large timberland owners in Oregon and Washington and TIMO groups,” Starkey said.

The log-selling and tree-growing company, headquartered in North Bend, has owned timberlands in Coos Bay for 100 years. The company was formerly a division of Menasha Corporation based out of Neenah, Wis., but spun off from that company in 2001. The two companies have separate boards of directors but the same group of shareholders.

In the past, Menasha owned a pulp and paper mill on the North Spit. But it was sold in the 1980s to Weyerhaeuser, which ultimately closed the mill. Menasha also operated a plywood mill at 1515 Sheridan Ave., in North Bend, where the main office is now, but that is no longer in operation.

Starkey said the company ships out 100 loads of logs every day.

“We can do that on a sustained basis forever,” he said.