A deal by Verso Paper to merge with bankrupt rival NewPage may be off nearly as soon as it was announced. Verso has Maine operations in Jay and Bucksport, while NewPage has a mill in Rumford.
Tennessee-based Verso on Monday said it was in talks with NewPage, based in Ohio, about a "potential business combination" as part of NewPage's reorganization. The next day, however, NewPage said the deal was likely dead. In a press release, Verso said it offered first-lien holders of NewPage Corp. a $1.425 billion deal, consisting of $1.075 billion in new Verso first-lien notes, $200 million in cash and $150 million in Verso common stock. The proposed deal also included repaying 100% the $600 million debtor-in-possession financing NewPage received from JP Morgan to continue operating, as well as some level of recovery for unsecured creditors.
Verso said merging would "create a stronger business in the global coated and supercalendered paper industry," saving money in materials. But the company said it was "disappointed with the lack of progress in advancing its discussions."
On Tuesday, NewPage said the proposal "posed significant downside risks to its stakeholders, employees and business," and advised first-lien noteholders not to support the deal. The company said it didn't "anticipate further discussions" on the deal.
NewPage filed for Chapter 11 bankruptcy in September 2011 with assets of more than $1 billion and at least $1 billion in debt.