Activist Jeff Smith Sends New Letter to Wausau Paper Corp. (WPP); Nominates Three Directors to the Board

The notorious activist investor Jeff Smith and his hedge fund Starboard Value have recently reported taking another step regarding its plans about Wausau Paper Corp. (NYSE:WPP). In a newly amended filing with the SEC, Starboard disclosed a letter sent to the company’s board, according to which the fund has nominated three directors to be elected this year to the company’s Board.

Jeff Smith

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

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

The 10 Biggest Outlet Malls in USA

The 5 Most Popular Rap Songs of All Time

The 10 Countries that Eat the Most Meat

The10 Most Expensive Countries to Fly To

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!