MIAMISBURG, Ohio (From news reports) -- A previous suiter for Verso Corp. is back with a new offer to buy the company.
Atlas Holdings LLC, in a filing with the Securities and Exchange Commission said the company is offering $20 per share for Verso's outstanding stock shares, buying out Verso entirely. The estimated value of the company is $866 million, according to Atlas Holdings.
Atlas sent a letter to Verso Sunday via email, announcing its proposal to purchase Verso, saying the company is already a long-term Verso investor, owning shares representing about 9% of the company's voting power. Timothy Fazio, Atlas Holdings' managing partner stated Atlas is "extremely enthusiastic about this proposed transaction."
Verso stock jumped 10.4% Monday, closing at $19.04 per share.
The company previously tried to unsuccessfully to buy Verso between late 2017 and 2019. Verso sold its Stevens Point and Jay, Maine mills to Pixelle Specialty Solutions in early 2020.
In 2020, however, Verso hit additional complications through the COVID-19 pandemic. It indefinitely shut down its mills in Wisconsin Rapids and Duluth, Minnesota, due to the drop in demand when the pandemic hit. Verso sold its Duluth mill in May, and it has been in discussions with interested parties for the Wisconsin Rapids mill.
Atlas Holdings, a Greenwich, Connecticut-based company, was founded in 2002. It owns and operates 23 companies with about 40,000 employees. It also has experience in the pulp and paper industry, owning and operating an uncoated papermaker, book producer, Canadian pulp manufacturer and a tissuemaker.
"We believe Atlas is the ideal acquirer of the Company given our expertise in executing complex transactions and our experience in the pulp, paper and packaging sector," Fazio wrote in the offer letter.
A sale of Verso would need approval by Verso's board of directors and its shareholders.
Verso representatives did not immediately respond to a request for comment Monday afternoon.
Republican state Rep. Scott Krug of Nekoosa, Wisconsin said Monday he thinks Verso is likely to sell to Atlas. Krug, who has been involved in local efforts to support Verso's former employees and the community through the Wisconsin Rapids Together task force, said local officials would connect with Atlas to discuss its plans for the Wisconsin Rapids mill and reopening production if the sale is approved.
Krug was an author of the "Mill Bill," vetoed last week by Gov. Tony Evers, that would have authorized the loan of $65 million in federal coronavirus relief funds to a purchaser to buy Wisconsin Rapids and Park Falls paper mills. Evers said he supports the effort to restart the mills, but objected to the source of funding.
Krug said there is still a possibility that the Legislature would override that veto, while Democrats said they want to work with Republican lawmakers to find a different way to fund the loans. If either happens the federal loan could be applicable to help the sale.
On Monday afternoon, Democratic legislators introduced new legislation similar to the previous bill that included amendments that had been rejected for that bill. The loans would come from the state's projected budget surplus instead of federal funds.
In his letter, Fazio said Atlas' proposal is not contingent on any third-party financing. He said the company has adequate resources to make the acquisition quickly.
Krug said recent announcements that two paper companies, Clearwater Paper and Neenah Inc, would shut down operations in the Fox Valley demonstrates a broader need for the state to help the paper industry across Wisconsin.
"We need to look at the industry as a whole, to see how we can help," Krug said. "In this whole process, we're seeing other (mills) closing. This is bigger than us."