NewPage Corporation is threatening to end an announced merger with Verso Paper.
In a letter to Verso executives, NewPage board chairman Mark Angelson said they will re-evaluate its sale to Verso Paper Corporation and consider all of its options if the company is unable to meet the conditions of the proposed merger.
The $1.4 billion merger was announced Jan. 6. It includes the Escanaba Paper Mill in Escanaba. Verso also owns a paper mill in Quninnesec.
Angelson said in the letter filed with the SEC last Friday that they do not consent to Verso’s request for a waiver or amendment to an exchange offer meant to reduce debt. He called it is a “fundamental element of the transaction.”
“If Verso is unable to satisfy the Exchange Offer condition, we will re-evaluate the merger and consider all our options,” he wrote.
Verso had said the response to the exchange offer was substantially less than what was needed to meet the requirement in the merger agreement.
NewPage Sales Fall
Meanwhile, sales at NewPage Corporation fell 2 percent or $77 million in 2013. Net sales in 2013 were 3-billion 54-million dollars.
President and CEO George Martin says net sales were primarily affected by lower average paper prices and lower sales volumes. The industry itself saw a 4.3 percent decline in North American demand for coated paper in 2013.
Overall, the company reported a net loss of $2 million for the year, primarily due to reorganization. In 2012, they had a net income of $1.2 million.