BOSTON Aug 20 Hedge fund titan SAC Capital
Advisors is applying fresh pressure on Clearwater Paper Corp
to raise its share price by urging the company to split
itself into two parts and consider selling one or both
businesses, according to a regulatory filing.
Steven Cohen's $14 billion hedge fund, which ranks as the
company's third biggest investor with a 7.1 percent stake,
proposed that the board consider separating the main businesses,
hire an investment bank to explore a sale and grow its board by
SAC, whose investment decisions have long been closely
followed in the investment world, first made its interest in
Clearwater Paper known in May when fund manager David Rosen
wrote to chief executive officer Gordon Jones that Clearwater
Paper was "deeply undervalued."
Nearly four months later, the Stamford, Connecticut-based
fund followed up with specific prescriptions for the Spokane,
Washington-based paper company, according to filings made with
the Securities and Exchange Commision late on Friday.
SAC, which is known for having delivered double-digit
returns over decades, owns 1.64 million shares of Clearwater
Paper, according to the filing.
A spokesman for the fund declined to comment beyond the
"Clearwater Paper has had an open dialogue with SAC and
continues to carefully analyze its proposals," said company
spokesman Matt Van Vleet.
The fund proposed to the company's board that it "initiate
the separation of the Issuer's Consumer Products business from
its Pulp and Paperboard business, to enable the Issuer to pursue
the divestiture of one or both businesses to one or more
strategic and/or financial buyers," the filing said.
It also urged the board to "engage an investment banking
firm to advise on the feasibility and prospective terms of such
potential divestitures, including identifying potential buyers;
and nominate and elect two new independent members of the Board
(thereby increasing the board's size from six to eight
members)," the filing said.
Clearwater Paper was itself spun off from forestry company
Potlatch Corp. in 2008 but its share price has failed to
dazzle, rising only 2.95 percent since January.
While SAC is generally not known as an activist investor,
its interest in Clearwater Paper may have given the stock a shot
in the arm, however. In the last three months, roughly the time
since which SAC's interest in the company was first disclosed,
the share price has climbed 18 percent.