Starboard is the largest shareholder of Wausau Paper Corp. (NYSE:WPP), holding 15.2% of the company's stock. The fund is holding this position for approximately two and half years, since June 2011, when Starboard first disclosed going activist on the company. According to Starboard, Wausau Paper Corp. (NYSE:WPP) is significantly undervalued and over the past two years, the investor is trying to pursue the company into taking serious action to enhance the shareholder value of the company.
"Despite our efforts over the past two-and-a-half years to recommend specific actions to enhance shareholder value and to place four highly-qualified independent directors on the Board through two separate settlement agreements, Wausau’s operations have continued to dramatically underperform," Starboard says in the new letter.The decision to nominate three new directors for election at the next meeting, was made because the fund considers that the lack of results and Wausau Paper Corp. (NYSE:WPP)'s continued underperformance is still related to the fact that the large part of the Board and management have remained unchanged. The letter also states that Starboard's involvement into the management of the company has already brought some positive results. The company has left its non-core, money-losing Printing and Writing Business in 2012 and Technical Paper business last year, which made it possible to focus and become a leading pure-play away-from-home Tissue company. This argument is also supported by the stock of Wausau Paper Corp. (NYSE:WPP), which since June 2011 (the first disclosure of Starboard's activist position in the company) has gained almost 100%. However, Starboard considers that there is still a lot of work that needs to be done in order for shareholders to receive the full value of their investment in Wausau Paper Corp. (NYSE:WPP). As the fund also stated in its previous letter earlier in October, Wausau has to drastically cut its corporate overhead and return more capital for shareholders in the form of a stock repurchase program worth $100 million and by installing an annual dividend of at least $1.00 per share. If Wausau Paper Corp. (NYSE:WPP) adopts the measures proposed by Starboard, it has a chance to easily hike its EBITDA to over $100 million, just based on cost savings and without a large increase in revenue, the letter also says. The full text of the letter can be accessed through the link below: Starboard Value Letter to Wausau Paper January 17 Disclosure: none