Wausau Paper Says Disappointed By Starboard's Decision To Nominate Directors

(RTTNews) - Wausau Paper corp. (WPP) issued a statement in response to the announcement by Starboard Value LP that it has nominated a slate of three directors for election to Wausau's Board of Directors at the Company's 2014 Annual Meeting of Shareholders. Wausau Paper said that it was surprised and disappointed by Starboard's actions. Over the past two years, the company has tried to work constructively with Starboard and have already added four of their nominees to the company's nine-person board.

However, the company believes that it is disproportionate and inappropriate that Starboard - which holds only 15% of the company's shares - should be able to designate the majority of the Board, as would result if their new nominees were elected.

The company said it expects to communicate further with shareholders in due course.

"Under our current management and Board, Wausau Paper has completed a successful strategic transformation into a pure play tissue company that is delivering strong volumes, margin expansion, earnings and free cash flow growth. The Company has excellent forward momentum and our stock price has increased approximately 40% over the past year. Our Board is unanimously supportive of the Company's strategy and management team, and is fully committed to creating further value and acting in the best interests of our shareholders," the company said.

Last week, Starboard Value LP said that it believed Wausau Paper was at a Crossroads with two Fundamental Choices: either immediately replace management and improve execution to position the company for standalone success, or explore a sale of the company to a financial or strategic buyer at a premium.

Starboard noted that it had serious concerns with Wausau's prolonged underperformance under the direction of the current management team and Board. Despite Starboard efforts over the past two-and-a-half years to recommend specific actions to enhance shareholder value and to place four independent directors on the Board through two separate settlement agreements, Wausau's operations continued to dramatically underperform.

Starboard had believed the Company's continued underperformance was directly tied to the fact that Board and management leadership remain largely unchanged.

Starboard had said it nominated a slate of three candidates for election to the Wausau Board at the Company's 2014 Annual Meeting. Starboard's director nominees include: Cynthia Jamison, Chairman of the Board of Directors of Tractor Supply Company; Jeffrey Smith, co-Founder and CEO of Starboard; and Russell Taylor, Former President and CEO of Cellu Tissue Holdings Inc.