Verso Corp. is urging its stockholders to approve the sale of two paper mills, including one in Jay, even as two large shareholders continue to criticize the deal.

Ohio-based Verso said Monday that it has received all the regulatory approvals it needs to sell the mills – the one in Jay, along with another in Wisconsin – to Pixelle Specialty Solutions, a Pennsylvania-based paper company. But Verso still needs approval from its stockholders, and a vote has been scheduled for the company’s annual meeting next week.

Logs are delivered to the Androscoggin Mill in Jay in 2005. John Ewing/Staff Photographer file

The company issued a statement saying it will return to shareholders at least $225 million from the sale of the two mills. It said the transaction would be worth up to $282 million and result in a company that is “debt-free, streamlined” and able to focus on its graphic paper production.

The company has been engaged in a dispute with two dissident shareholders, private equity firms Atlas Holdings and Blue Wolf Capital Partners, which oppose the sale of the mills and are backing their own slate of directors for Verso’s board. The two private equity firms jointly own Twin Rivers Paper Co. in Madawaska.

Verso has proposed its own slate of new directors in a bid to fend off the election of directors backed by the two equity firms. Together, Atlas and Blue Wolf own about 9 percent of Verso’s shares.

Analysts say that if the private equity firms are able to scuttle the deal with Pixelle, it would likely lead to a merger of Verso and Twin Rivers.


The two sides have been fighting over the mill sale for months. This month, Atlas and Blue Wolf filed a lawsuit alleging that Verso had not provided them with all the information they sought on the proposed sale, a charge that Verso denied.

The two private equity firms have encouraged other shareholders to abstain from voting on the proposed sale as a way of killing it, Verso has alleged. Verso said it needs a majority of shareholders to vote in favor of the sale for it to go through.

“While an abstention may seem to be neutral, Atlas/Blue Wolf is actively sabotaging the deal,” Verso said in a Jan. 13 letter to shareholders. “Stockholders should not be fooled.”

Atlas and Blue Wolf, on the other hand, have questioned the compensation of board members who, they said, earn nearly $400,000 a year in stock and cash. The two investors also said Verso has been slow to call a shareholder meeting, and they questioned the board’s competency to run the business, criticizing a decision in 2018 to convert one of the machines at the Jay mill from paper production to container board and other packaging grades.

In addition, the two private equity firms allege that Verso’s plans for the funds from the sale of the two mills, which they estimated at $400 million, are flawed and don’t return enough money to shareholders.

Verso said Atlas and Blue Wolf’s strategy is focused on killing the Pixelle deal to “enhance the competitive position of Twin Rivers,” which competes with Verso in the market for coated specialty papers.

The company’s annual shareholders’ meeting is scheduled for Jan. 31 in New York.

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