NewPage likely to merge with Verso

CUMBERLAND — A New York City-based financial analyst says that despite delays, a planned merger between Verso Paper Corp. and NewPage remains likely because there is no reasonable alternative. Chip Dillon of Vertical Research Partners said the need to extend negotiations between Verso and its bondholders isn''t in itself significant. The initial request to bondholders to buy into decisions needed to finance the merger expired Thursday and were then extended.

"It''s a price negotiation process," Dillon said. The deal needs to happen because the alternative is for the two companies and their debt holders to commit suicide together, Dillon said.

On Jan. 28, Verso officials expressed concern about lack of progress on debt exchanges needed to finance the merger. "Verso is concerned about its ability to satisfy the condition and thus close the merger," the Jan. 28 letter, signed by David J. Paterson, the president and CEO of Verso, said. The trouble involves complicated financial transactions announced at the time of the merger.

A planned merger between the two struggling companies was announced in early January. Verso is the smaller of the two companies.

The Luke mill, which is now owned by NewPage, employs nearly 900 people.

In the summer of 2012, NewPage turned down a proposal to combine operations with Verso while NewPage was in Chapter 11 bankruptcy.

NewPage emerged from bankruptcy in December 2012.