JAY, Maine — Verso Paper Corp. announced Wednesday that it has ceased further discussions with NewPage Corp. or its creditors regarding a potential merger, according to a press release on its website.
Earlier this year, Verso announced it was looking to merge with the Ohio-based corporation, which operates a mill in Rumford.
“After careful analysis, we believe it is in the best interests of our company and its stakeholders to focus on the many other opportunities for Verso, including internal growth projects and other potential strategic alternatives,” Verso President and CEO David Paterson said in a statement from its Tennessee-based headquarters.
NewPage Corp. announced in July that it did not intend to merge, nor did it anticipate further discussion about the proposal with Verso.
In July, Verso reported having discussions with certain holders of NewPage’s 11.375 percent first-lien senior secured notes. Under the terms of Verso’s proposed deal, the holders of the notes would get $1.08 billion of new Verso notes, $150 million of new Verso stock and $200 million in cash.
Verso operates mills in Jay and Bucksport, and Quinnesec, Mich. It is a leading North American producer of coated papers, including coated ground wood and coated freesheet and specialty projects.
NewPage Corp. operates seven mills throughout the United States, including one in Rumford.
NewPage filed for bankruptcy in September 2011. It announced last month that it filed a Chapter 11 restructuring plan with the U.S. Bankruptcy Court for the District of Delaware.
The company is North America’s largest manufacturer of coated paper, employs about 750 people at the Rumford mill and pays 46 percent of the town’s property taxes.
Verso employs about 1,600 people at its Maine mills.
Yikes. It’s never good when these mills start making headlines about financial issues.
Shocker. You mean New Page debt holders were not interested in what amounts to $200 million in cash and $1.230 billion in Verso notes and equity (aka monopoly money)? Back to the old saying—a small pile of crap “consolidated” with a big pile of crap, is just a bigger pile of crap. In other news, Wal-mart shareholders reject a buyout offer from Marden’s Surplus and Salvage.
This probably would have been a smart move on the part of both companies. Each company has some good, average assets that combined would provide synergy going forward. Otherwise, I think both are headed for a long, slow decline.
Correct – except for the long and slow part (in my opinion). How long can they bleed?
Paper mills die a slow death. Just look at the length of time GN has been in the throes of death.
After further consideration, you’re right. while I love the business, I’ve always been amazed how much cash people are willing to burn on their deathbed. Hope springs eternal, I suppose.
I was the Controller in a mill a while back that sucked $200M of cash from the parent company before they realized that publication papers were not the business they really wanted to be in after all.
“Other potential strategic alternatives” would that be shutting down paper machines in Bucksport and becoming a power plant? Let’s face it unless you make toilet paper,computers,Kindles and reading news on line the paper industry is on it’s way out. This is sad but also true.
Its really ironic that Millinocket’s town council is worried about the state’s wood supply. Yet the town is completely dependent on tourism for its businesses. I do not understand peoples’ rational.