Both Leading Proxy Advisory Firms Glass Lewis and ISS Recommend that Verso Stockholders Vote FOR the Pixelle Transaction

Verso Corporation (NYSE: VRS) (“Verso” or the “Company”) today announced that leading independent proxy advisory firm Glass, Lewis & Co. (“Glass Lewis”) joins Institutional Shareholder Services (“ISS”) in recommending that Verso stockholders vote “FOR” the Company’s pending sale of its Androscoggin and Stevens Point mills to Pixelle Specialty Solutions LLC (the “Pixelle Transaction”) at the Company’s stockholder meeting scheduled to be held on January 31, 2020 (the “Annual Meeting”).

Glass Lewis stated:
“We find that the proposed sale of Verso’s Specialty Mills to Pixelle is a generally reasonable transaction that appears to be in the best interests of Verso shareholders. . .

Overall, given the scope of the process leading to the proposed Specialty Mills transaction, including public announcements of the Company’s strategic review of alternatives in from late 2017 through mid-2019, as well as the number of potential counterparties involved, we believe the board has taken generally reasonable steps to evaluate potential alternatives prior to entering into the sale agreement with Pixelle.”1

While Glass Lewis recommended that stockholders vote for the election of Atlas/Blue Wolf’s nominee, Sean T. Erwin, whose appointment to the Board was included in multiple settlement constructs proposed by the Verso Board, Glass Lewis did not recommend the remaining two dissident nominees:

“We do not believe the election of the remaining Dissident Nominees [Jeffrey E. Kirt and Timothy Lowe] is warranted given their potential conflicts of interest and relationship with ABW. Moreover, we are hesitant to afford ABW outsize board representation at this time in light of its demonstrated interest in a potential transaction involving Verso and its recent attempts to take control of the Company.”2

Vote “FOR” the Pixelle Transaction and “FOR” Verso’s Director Nominees on the WHITE Proxy Card Today

The Verso Board unanimously urges all stockholders to use the WHITE proxy card to vote “FOR” Verso’s highly qualified director nominees: Dr. Robert K. Beckler, Paula H.J. Cholmondeley, Randy J. Nebel, Steven D. Scheiwe, Jay Shuster, Adam St. John and Nancy M. Taylor. The Board advises all stockholders to simply discard any BLUE proxy card or other proxy materials received from Atlas/Blue Wolf.

Verso and Glass Lewis Address Favorable Court Ruling
In addition, Verso announced that it is pleased with the Delaware Chancery Court’s (the “Court”) ruling on January 17, 2020. The Court determined that Atlas/Blue Wolf lacked any credible basis for their allegations that Verso omitted or misstated material information from Verso’s proxy materials. This ruling confirms what Verso has contended since the lawsuit was filed: Verso has provided sufficient information related to the Pixelle Transaction to appropriately inform its stockholders. The Court conditioned limited inspection on a strict confidentiality order consistent with the terms urged by Verso. On January 21, 2020, Verso delivered substantially all of the production ordered by the Court pursuant to Delaware General Corporation Law Section 220 to Lapetus Capital II, LLC, an affiliate of Atlas/Blue Wolf. In allowing inspection, the Court recognized Atlas/Blue Wolf had to meet what the Court characterized as the “lowest possible burden of proof.” Verso was willing to produce the documents before the Court issued its ruling, because Verso has nothing to hide. Atlas/Blue Wolf’s allegations of wrongdoing lack merit.

Regarding Verso’s disclosure regarding the Pixelle Transaction, Glass Lewis in its positive recommendation stated:

“At this juncture, we believe the board has provided adequate disclosure regarding the intended use of net proceeds from the transaction and we view its plan to return at least $225 million to shareholders favorably. . .

Overall, we believe the proposed sale of the Specialty Mills is a net positive for Verso shareholders and that shareholders have been provided with sufficient information to assess the merits of the transaction and to make an informed voting decision on the transaction proposal at the 2019 annual meeting. We do not believe ABW has made a compelling argument that shareholders lack sufficient information to properly assess the transaction, particularly following the release of Verso’s definitive proxy statement and additional voluntary disclosures, including with respect to the pulp supply agreement with Pixelle and the expected amount and use of net proceeds from the transaction.”3

Stockholders should be aware that Atlas/Blue Wolf made several proposals to acquire the entire Company in 2018, but was never willing to pay a cash consideration of more than $460 million. As a reminder, stockholders should note that the purchase price for the Pixelle Transaction, which included the Androscoggin and Stevens Point mills, was $400 million, resulting in estimated net cash proceeds of $336 million.

As previously announced, the Company believes that Atlas/Blue Wolf’s determination to ABSTAIN from vote on the Pixelle Transaction, allegedly due to a need for additional disclosure, is a pretense for their self-serving agenda and questionable motives.

The Verso Board unanimously urges all stockholders to use the WHITE proxy card to vote “FOR” the Pixelle Transaction in accordance with the Glass Lewis and ISS recommendations. The Board advises all stockholders to simply discard any BLUE proxy card or other proxy materials received from Atlas/Blue Wolf.

If you have questions or need assistance in voting your WHITE proxy card please contact:
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, New York 10018
(212) 929-5500
Toll-Free (800) 322-2885

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