Wausau Papers Bashed In Report

The largest shareholder in the Wausau Paper Corporation issued a blistering indictment of the company’s management yesterday. The Wall Street investment firm of Starboard Value has pushed for a major restructuring of Wausau Paper ever since it began to accumulate its stock in the spring of 2011. Last Friday, Wausau said it would sell its long-running paper mills in Mosinee and Rhinelander, plus one in Minnesota. Starboard said it was not impressed. It accused Wausau board chairman Tom Howatt of acting in bad faith, by making other stockholders believe that Wausau has a strategy for selling off under-performing paper mills. And Starboard said it would be “highly inefficient” for Wausau Paper to keep its headquarters in Wisconsin. Wausau did not comment.

It appeared that the two sides made a truce in their previous squabbling in late 2011, when Wausau agreed to close its century-old mill in Brokaw which made papers for writing-and-printing. After that, Starboard said Wausau Paper insisted on keeping their disagreements out of the public eye – and the investment firm said Wausau kept resisting its demand to make bold moves. In the meantime, Starboard pressed to add three of its people to Wausau’s board, giving the investment firm a majority on the seven-member panel. Starboard said Wausau’s chairman had pleaded for the investment firm to delay a public announcement of its board nominations, so some kind of settlement could be reached – and Wausau’s announcement that it was selling the three mills came soon afterward.