MIAMISBURG, Ohio, Jan. 23, 2020 /PRNewswire/ -- Verso
Corporation (NYSE: VRS) ("Verso" or the "Company") today announced
that leading independent proxy advisory firm Glass, Lewis & Co.
("Glass Lewis") joins Institutional Shareholder Services ("ISS") in
recommending that Verso stockholders vote "FOR" the Company's
pending sale of its Androscoggin and Stevens Point mills to Pixelle
Specialty Solutions LLC (the "Pixelle Transaction") at the
Company's stockholder meeting scheduled to be held on January 31, 2020 (the "Annual Meeting").
Glass Lewis stated:
"We find that the proposed sale
of Verso's Specialty Mills to Pixelle is a generally reasonable
transaction that appears to be in the best interests of Verso
shareholders. . .
Overall, given the scope of the
process leading to the proposed Specialty Mills transaction,
including public announcements of the Company's strategic review of
alternatives in from late 2017 through mid-2019, as well as the
number of potential counterparties involved, we believe the board
has taken generally reasonable steps to evaluate potential
alternatives prior to entering into the sale agreement with
Pixelle."1
While Glass Lewis recommended that stockholders vote for the
election of Atlas/Blue Wolf's nominee, Sean
T. Erwin, whose appointment to the Board was included in
multiple settlement constructs proposed by the Verso Board, Glass
Lewis did not recommend the remaining two dissident nominees:
"We do not believe the election
of the remaining Dissident Nominees [Jeffrey E. Kirt and Timothy Lowe] is warranted given their potential
conflicts of interest and relationship with ABW. Moreover, we are
hesitant to afford ABW outsize board representation at this time in
light of its demonstrated interest in a potential transaction
involving Verso and its recent attempts to take control of the
Company."2
Vote "FOR" the Pixelle Transaction and "FOR" Verso's Director
Nominees on the WHITE Proxy Card Today
The Verso Board unanimously urges all stockholders to use the
WHITE proxy card to vote "FOR" Verso's highly qualified
director nominees: Dr. Robert K.
Beckler, Paula H.J.
Cholmondeley, Randy J. Nebel,
Steven D. Scheiwe, Jay Shuster, Adam St.
John and Nancy M. Taylor. The
Board advises all stockholders to simply discard any BLUE proxy
card or other proxy materials received from Atlas/Blue Wolf.
Verso and Glass Lewis Address Favorable Court Ruling
In addition, Verso announced that it is pleased with the
Delaware Chancery Court's (the
"Court") ruling on January 17, 2020.
The Court determined that Atlas/Blue Wolf lacked any credible
basis for their allegations that Verso omitted or misstated
material information from Verso's proxy materials. This ruling
confirms what Verso has contended since the lawsuit was filed:
Verso has provided sufficient information related to the Pixelle
Transaction to appropriately inform its stockholders. The
Court conditioned limited inspection on a strict confidentiality
order consistent with the terms urged by Verso. On January 21, 2020, Verso delivered substantially
all of the production ordered by the Court pursuant to Delaware
General Corporation Law Section 220 to Lapetus Capital II, LLC, an
affiliate of Atlas/Blue Wolf. In allowing inspection, the Court
recognized Atlas/Blue Wolf had to meet what the Court characterized
as the "lowest possible burden of proof." Verso was willing to
produce the documents before the Court issued its ruling, because
Verso has nothing to hide. Atlas/Blue Wolf's allegations of
wrongdoing lack merit.
Regarding Verso's disclosure regarding the Pixelle Transaction,
Glass Lewis in its positive recommendation stated:
"At this juncture, we believe
the board has provided adequate disclosure regarding the intended
use of net proceeds from the transaction and we view its plan to
return at least $225 million to
shareholders favorably. . .
Overall, we believe the
proposed sale of the Specialty Mills is a net positive for Verso
shareholders and that shareholders have been provided with
sufficient information to assess the merits of the transaction and
to make an informed voting decision on the transaction proposal at
the 2019 annual meeting. We do not believe ABW has made a
compelling argument that shareholders lack sufficient information
to properly assess the transaction, particularly following the
release of Verso's definitive proxy statement and additional
voluntary disclosures, including with respect to the pulp supply
agreement with Pixelle and the expected amount and use of net
proceeds from the transaction."3
Stockholders should be aware that Atlas/Blue Wolf made several
proposals to acquire the entire Company in 2018, but was never
willing to pay a cash consideration of more than $460 million. As a reminder, stockholders should
note that the purchase price for the Pixelle Transaction, which
included the Androscoggin and Stevens Point mills, was $400 million, resulting in estimated net cash
proceeds of $336 million.
As previously announced, the Company believes that Atlas/Blue
Wolf's determination to ABSTAIN from vote on the Pixelle
Transaction, allegedly due to a need for additional disclosure, is
a pretense for their self-serving agenda and questionable
motives.
The Verso Board unanimously urges all stockholders to use the
WHITE proxy card to vote "FOR" the Pixelle Transaction in
accordance with the Glass Lewis and ISS recommendations. The Board
advises all stockholders to simply discard any BLUE proxy card or
other proxy materials received from Atlas/Blue Wolf.
If you have questions or need assistance in voting your
WHITE proxy card please contact:
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, New York 10018
proxy@mackenziepartners.com
(212) 929-5500
or
Toll-Free (800) 322-2885
About Verso
Verso Corporation is the turn-to company for those looking to
successfully navigate the complexities of paper sourcing and
performance. A leading North American producer of specialty and
graphic papers, packaging and pulp, Verso provides insightful
solutions that help drive improved customer efficiency,
productivity, brand awareness and business results. Verso's
long-standing reputation for quality and reliability is directly
tied to our vision to be a company with passion that is respected
and trusted by all. Verso's passion is rooted in ethical business
practices that demand safe workplaces for our employees and
sustainable wood sourcing for our products. This passion, combined
with our flexible manufacturing capabilities and an unmatched
commitment to product performance, delivery and service, make Verso
a preferred choice among commercial printers, paper merchants and
brokers, converters, publishers and other end users. For more
information, visit us online at versoco.com.
Forward-Looking Statements
In this press release, all statements that are not purely
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, or
"Securities Act," and Section 21E of the Securities Exchange Act of
1934, as amended, or "Exchange Act." Forward-looking statements may
be identified by the words "believe," "expect," "anticipate,"
"project," "plan," "estimate," "intend" and other similar
expressions. They include, for example, statements relating to our
business and operating outlook; assessment of market conditions;
and the growth potential of the industry in which we operate.
Forward-looking statements are based on currently available
business, economic, financial and other information and reflect
management's current beliefs, expectations and views with respect
to future developments and their potential effects on us. Actual
results could vary materially depending on risks and uncertainties
that may affect us and our business. The following factors, among
others, could cause actual results to differ from those set forth
in the forward-looking statements: the long-term structural decline
and general softening of demand facing the paper industry; our
exploration of strategic alternatives, including the possible sale
or merger of our entire company or a material portion of our
business and our ability to consummate any such strategic
transactions, including the proposed sale of our Androscoggin Mill
and Stevens Point Mill; the risk that the purchase agreement for
the sale transaction would limit our ability to pursue other
strategic alternatives to the sale transaction; the risk that the
purchase agreement for the sale transaction might expose us to
contingent liabilities; risks related to our ability to obtain
stockholder approval for the sale transaction; the risk that the
pending sale transaction could create unknown impacts on our future
prospects; the risk that the amount of net proceeds that we would
receive from the sale transaction is subject to uncertainties; the
risk that stockholders are not guaranteed to receive any of the
proceeds from the sale transaction; the risk that management could
spend or invest the net proceeds from the sale transaction in ways
against stockholders' wishes; the risk that some of our executive
officers might have interests in the sale transaction that might be
in addition to, or different from, stockholders' interests; the
risk that our business following the sale transaction would be
reduced and less diversified; the risk that we would be unable to
compete with respect to certain specialty paper products for two
years after the closing of the sale transaction; the risk that we
may be unable to obtain governmental and regulatory approvals
required for the sale transaction, or required governmental and
regulatory approvals may delay the transaction or result in the
imposition of conditions that could cause the parties to abandon
the sale transaction; the risk that an event, change or other
circumstances could give rise to the termination of the sale
transaction; the risk that failure to consummate the sale
transaction might materially and adversely affect our business,
financial condition and results of operation; the risk that a
condition to closing of the sale transaction may not be satisfied;
the risk that we would be required to pay a termination fee or
expense reimbursement if the purchase agreement for the sale
transaction is terminated under specified circumstances, which
might discourage third parties from submitting an alternative
proposal; the timing to consummate the sale transaction; the risk
that any announcement relating to the sale transaction could have
adverse effects on the market price of our common stock; the risk
of and the outcome of any pending or threatened litigation related
to the sale transaction or the Annual Meeting; the risk of
disruption from the sale transaction making it more difficult to
maintain relationships with customers, employees or suppliers; the
diversion of management time on transaction-related issues; our
adoption of a limited duration stockholder rights plan and its
ability to delay or discourage a merger, tender offer or change of
control; negative effects of a proxy contest and the actions of
activist stockholders; developments in alternative media, which
have and are expected to continue to adversely affect the demand
for some of our key products, and the effectiveness of our
responses to these developments; intense competition in the paper
manufacturing industry; our dependence on a small number of
customers for a significant portion of our business; any additional
closure and other restructuring costs; our limited ability to
control the pricing of our products or pass through increases in
our costs to our customers; changes in the costs of raw materials
and purchased energy; negative publicity, even if unjustified; any
failure to comply with environmental or other laws or regulations,
even if inadvertent; legal proceedings or disputes; any labor
disputes; our ability to continue to execute and implement our
strategic plan; our initiatives to improve our financial and
operational performance and increase our growth and profitability;
our future operational and financial performance; the effect that
the election of Atlas/Blue Wolf's nominees to our board of
directors will have on our execution of our long-term plan and
long-term stockholder value; the future effect of our strategic
plan on our probability, growth and stockholder return; and the
potential risks and uncertainties described in Part I, Item 1A,
"Risk Factors" of our Annual Report on Form 10-K for the year ended
December 31, 2018, as amended, Part
I, Item 2, "Management's Discussion and Analysis of Financial
Condition and Results of Operations," Part II, Item 1A, "Risk
Factors" of our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2019, and "Risk Factors
Relating to the Sale Proposal" of our definitive proxy statement
filed with the SEC on December 30,
2019, as such disclosures may be amended, supplemented or
superseded from time to time by other reports we file with the SEC,
including subsequent annual reports on Form 10-K and quarterly
reports on Form 10-Q. We assume no obligation to update any
forward-looking statement made in this press release to reflect
subsequent events or circumstances or actual outcomes.
Additional Information and Where to Find It
In connection with the solicitation of proxies concerning the
matters to be considered at the Annual Meeting, including the
proposed sale transaction, the Company has filed a definitive proxy
statement, WHITE proxy card and other materials with the SEC. WE
URGE INVESTORS TO READ THE PROXY STATEMENT (INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO), THE ACCOMPANYING WHITE PROXY
CARD, AND ANY OTHER MATERIALS FILED WITH THE SEC CAREFULLY BEFORE
MAKING ANY VOTING OR INVESTMENT DECISION BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT THE MATTERS TO BE CONSIDERED AT THE
ANNUAL MEETING. Investors may obtain copies of these documents free
of charge at the SEC's website (www.sec.gov) and from the
Company.
Participants in the Solicitation
The Company, its directors, executive officers and other persons
related to the Company may be deemed to be participants in the
solicitation of proxies from the Company's stockholders in
connection with the matters to be considered at the Annual Meeting,
including the proposed sale transaction. Information about the
directors and executive officers of the Company and their ownership
of Company common stock is set forth in the definitive proxy
statement for the Annual Meeting. Other information regarding the
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
is also in the definitive proxy statement for the Annual Meeting
and other relevant materials to be filed with the SEC when such
materials become available.
1 Permission to use quotations neither sought nor
obtained.
2 Permission to use quotations neither sought nor
obtained.
3 Permission to use quotations neither sought nor
obtained.
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SOURCE Verso Corporation