Investment firm Atlas Holdings has acquired almost 14% of Sylvamo, the former International Paper business that became a separate listed company last year. Atlas also holds an unspecified amount of derivatives on Sylvamo shares.
In a statement, Sylvamo’s board said: “The rights plan, which is designed to allow Sylvamo shareholders to realise the long-term value of their investment, reduces the likelihood any person or group could gain control of the company through open market or private accumulations of our shares without appropriately compensating shareholders for such control or providing the board sufficient time to make informed decisions.”
Atlas already has a number of North American pulp and paper interests in its portfolio, including Finch, Twin Rivers Paper Company, Millar Western and Marcal.
Sylvamo said that it recognised Atlas’ “extensive experience” in the paper industry. It also said it did not believe the current market price of its shares reflected the firm’s intrinsic value.
Atlas also owns print firm LSC Communications. After buying LSC it went on to try and acquire LSC’s former sister business RR Donnelley, which resulted in a bidding war for RRD that went on for months.
Sylvamo has sales of $3.5bn (£2.98bn) and employs some 7,500 people worldwide. It has mills in North America, Latin America, and Europe.
The business will announce Q1 results later this week, and is expected to provide an update on its business in Russia, where it suspended operations in early March.
Its Svetogorsk mill near the Finnish border employs 1,700 people and is described as one of the most efficient and modern pulp and paper mills in the country. It has benefited from investments totalling more than $740m over the past 25 years.
The mill makes SvetoCopy and Ballet printing papers, liquid packaging board, and bleached thermo-mechanical pulp.
Svetogorsk has an annual capacity of 720,000 short tons of pulp, paper and paperboard.
Sylvamo’s forestry operations are located in Tikhvin in the Leningrad region.
It also has offices in Moscow and Saint Petersburg.
The Russian operations accounted for approximately 15% of Sylvamo’s total revenue last year.
The firm’s share price has slipped by 5% over the past week, and was at $42.16 on Friday (6 May). However, since the start of the year the shares have gone up by almost 50%.
