Jan. 24 (Bloomberg) -- Altai Capital Management LP is joining Starboard Value LP’s push for changes at Wausau Paper Corp., the paper-products maker that has been targeted for “continued underperformance.”
Altai has amassed about 2.7 million shares, or 5.5 percent of Wausau Paper, according to a regulatory filing today. The New York-based hedge fund said it intends to discuss proposed board changes with Starboard and the company.
Starboard, the largest shareholder in Mosinee, Wisconsin-based Wausau, last week nominated three directors to the board and said the company should replace its management or seek a sale because of underperformance. The fund, which has been trying to make changes at the company for the past 2 1/2 years and already has four directors on the nine-person board, is demanding the return of more cash to investors, cost cuts and an improvement in management focus.
“Starboard has made a convincing prima facie case supporting the need for continued enhancement of the issuer’s board, in order to ensure that management is appropriately committed to an agenda of proactive change,” according to the Altai filing today. Wausau “can only benefit from the debate that will be generated by Starboard’s campaign.”
A Wausau spokesman declined to comment. Starboard didn’t immediately respond to a request for comment.
“While we always appreciate input from shareholders, we were surprised and disappointed by Starboard’s actions,” Wausau said in a Jan. 21 statement. “Over the past two years, we have tried to work constructively with Starboard.”
Wausau sold its specialty-paper segment last year and in 2012 divested a group of brands including Astrobrights and Royal. The stock, which has gained 38 percent in the past year, fell 0.5 percent to $13.42 at the close in New York, giving it a market capitalization of $664 million.
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