US: Paper makers may abandon merger plans

Paper makers Verso Paper and NewPage Holdings said they may be forced to abandon $1.4 billion merger plans due to low participation in a debt exchange offer, reports say.

Verso Paper announced a weak response to the exchange offer that would trade existing debts for another class of debts, a process necessary to complete the acquisition of its rival.

The deal was first announced earlier this month. Following the merger announcement, Verso Paper initiated the exchange offers regarding debts of two of its subsidiaries; the exchange is part of the conditions of the buyout.

But since the offer, Verso Paper has reportedly sent a letter to NewPage warning that it is concerned “about its ability to satisfy the exchange offer requirement and thus close the merger.” The letter was also filed with the US Securities and Exchange Commission.

The debt offer will be active through February 10, according to Verso Paper.

Full Content: Portland Press Herald

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