A New York hedge fund and major stockholder of Wausau Paper is demanding that the company move its headquarters out of Wisconsin. The hedge fund CEO also wants a seat on the company’s board of directors.
Jeffrey Smith, the CEO of Starboard Value, sent a harshly critical 10-page letter on Friday to the Wausau Paper board of directors, saying he had “serious concerns” with the company’s “prolonged under-performance under the direction of the current management team.” The letter recommends that the board close its headquarters in central Wisconsin, fire its managers, and consider selling the company. Smith’s letter also nominates him and two other executives to the board of directors.
Village of Kronenwetter Administrator Richard Downey said he hopes the company doesn’t move its headquarters out of his community.
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“Wausau Paper largely has been a part of central Wisconsin for a long time, and so it’s going to affect a lot of different lives if they move the rest of their operations out of here,” Downey said.
Downey noted that in its more than 100-year history, Wausau Paper executives have contributed much to the central Wisconsin region.
“There’s a lot of people there that contribute a lot in different ways, and we’d hate to see that organization go away,” he said, “because that would be one of the pillars of our community that would go away.”
Starboard’s latest demands come in the wake of Wausau Paper’s decision to shut down its oldest mill in Brokaw and sell its operations in Mosinee and Rhinelander. The company now operates mills in Kentucky and Ohio that produce paper towels.
Repeated calls and emails to Wausau Paper spokesman Perry Grueber weren’t returned in time for this story.
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