WAUSAU, WI (WSAU) - Wausau Paper and the hedge fund that controls much of their stock is continuing to criticize each other.
Monday, Starboard Value publicly criticized the management of Wausau Paper for its decision to put the Mosinee, Rhinelander, and Brainerd Minnesota mills up for sale as they shift their focus to the more profitable tissue market. Starboard officials accused Wausau Paper’s Chairman of the Board Tom Howatt of acting in bad faith and for having a strategy to sell off underperforming paper mills.
Wausau Paper fired back Tuesday. The Board of Directors sent Starboard Value’s Managing Member Jeffrey Smith a letter, and released it to the media as well.
The Wausau board told Smith they were, “disturbed by your letter and public statements regarding the recent discussions with you about the strategy and governance of Wausau Paper.” They further criticized Smith for inaccurately describing the recent events and changes at Wausau Paper.
Wausau Paper claims to have offered Smith and the Starboard Value group a non-disclosure agreement so they could be better informed about company strategy and processes, but the offer has not been accepted. In the letter, Wausau Paper’s board criticized Smith’s assertions about, “the conduct and commitment of this Board, including members nominated by you, without any basis in fact.”
Wausau Paper says their board is committed to taking actions that benefit all of their shareholders, including Starboard Value's investors.
The public squabble doesn’t seem to have upset many investors. Wausau Paper stock closed down a penny Tuesday at $9.00 a share, which is about where it’s been since Friday, January 11th. Their stock climbed roughly twenty cents Friday about the time Wausau Paper said they were placing three mills up for sale and planned to focus on the tissue market.
The letter Wausau Paper sent to Jeffrey Smith of Starboard Value LP can be seen by clicking on the application above.