The Dayton Daily News has coverage from July 6, 2012 of NewPage's rejection of the merger proposal.
Bankrupt NewPage Corp. has rejected a proposal to merge with another company, the company said Tuesday.
The Miami Twp.-based paper producer — which has been under Chapter 11 bankruptcy protection since September 2011 — said a group of its second-lien note holders proposed to a group of first-lien note holders to combine NewPage and Memphis, Tenn.-based Verso Paper Corp.
“After thoroughly evaluating this proposal, NewPage determined that the combination posed significant downside risks to its stakeholders, employees, and business,” the company said in a statement. “NewPage has also been advised that the first-lien note-holder group did not support the proposal. Accordingly, NewPage does not anticipate further discussions.”
NewPage’s announcement came a day after Verso released a statement saying talks about a possible merger were being held.
In its release, Verso said its proposal would provide NewPage’s first-lien noteholders with $1.425 billion of value, consisting of $1.075 billion of new Verso first-lien notes, $150 million of Verso common stock and $200 million cash.
Also, Verso said, the deal would include a 100-percent recovery in cash to repay NewPage’s debtor-in-possession financing, a 100-percent recovery in cash for the priority and administrative claims in the bankruptcy proceedings, a to-be-determined amount of Verso common stock for the holders of NewPage’s second-lien notes, and a to-be-determined recovery for NewPage’s unsecured creditors.