Jeffrey Smith Sends Another Letter to Wausau Paper Corp. (WPP)

Starboard Value Lp, managed by Jeffrey Smith, has sent a new letter to Wausau Paper Corp. (NYSE:WPP), expressing its disappointment after the company reported negative earnings for the fourth quarter of 2013.  The fund owns 7.50 million shares of the company, the stake amassing 15.2% of the common stock.

Jeff Smith

Starboard Value believes that there are lots of opportunities, which, if applied, can add value to the company, but the company has failed to monetize them. Starboard Value has several times pointed out the inability of the company to meet its laid down guidance.

Wausau Paper Corp. (NYSE:WPP) has also lowered its EBITDA guidance for FY2014 to $60-70 million, this is lower than the EBITDA achieved before the company spent  than $200 million on a new ATMOS tissue machine. Starboard further stated that the company is underperforming after the installation of the ATMOS tissue machine.

The company has lost $34.9 million, representing a 34.9% miss in EBITDA, after the installation of the ATMOS tissue machine. The investor considers that the company should have saved $25 million after the installation of the ATMOS. Instead the company has lowered its guidance for the fiscal year 2014.

“Unfortunately, Wausau’s Board has still not demonstrated a desire or willingness to work constructively with the Company’s largest shareholder to reconstitute the Board. It is hard to understand why the Board would continue to support directors that have proven unable to create value for shareholders and managers that have proven unable to execute on their own plans,” the letter states.

Last month, Starboard Value sent another letter to the board of Wausau Paper Corp. (NYSE:WPP),  asking for a change in the board of Wausau Paper Corp. Starboard plans to elect three new members to the board, two of them being industry experts and one a direct representative of the shareholders. This is in contrast to the members nominated by the company who have no relevant operating experience.

According to the letter, the company has not shown interest in nominating the desired members of the Starboard Value to its board, leaving the fund disappointed. Along with Starboard, Altai Capital Management and LionEye Capital Management, two other large shareholders of the company are also frustrated with non-performance of the company.

Last month, Rishi Bajaj, Toby Symonds, and Steve Tesoriere‘s Altai Capital purchased 2.6 million shares of Wausau Paper Corp (NYSE:WPP). Lioneye Capital Management, led by Stephen V. Raneri initiated a stake in Wausau Paper Corp. (NYSE:WPP) during the third quarter of 2013, and at the end of last year, held 1.6 million shares.

Starboard Value a spin-off from Ramius, is a fundamental oriented activist hedge fund that focuses on small cap stocks.

Starboard’s Letter to Wausau Paper (February 18)

Disclosure: none

Recommended Reading:

Billionaire George Soros’ Top Stock Picks

The Top Q4 Picks of Dan Loeb’s Third Point

Corvex Capital and Soroban Increase Their Position in Williams Companies, Inc. (WMB)

Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

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!