425: Glatfelter Addresses Shareholder Lawsuits with Supplemental Disclosures Amidst Berry Global Merger

Glatfelter Corporation is supplementing its proxy statement/prospectus with additional disclosures to address shareholder lawsuits related to its proposed merger with Berry Global Group's HHNF Business.

Summary

• Glatfelter Corporation has received complaints and demand letters from purported shareholders alleging disclosure deficiencies in the registration statement and proxy statement/prospectus related to the proposed merger with Berry Global Group's HHNF Business.
• To address these concerns and avoid potential disruptions, Glatfelter is voluntarily supplementing its disclosures.
• The supplemental disclosures relate to the background of the transactions and the opinion of Glatfelter's financial advisor, J.P. Morgan.
• Specifically, the disclosures provide additional details regarding the Glatfelter Board's meetings and discussions with potential strategic partners, as well as further information on J.P. Morgan's financial analysis, including discounted cash flow analysis for Glatfelter, Spinco, and synergies.
• The company's board of directors continues to recommend unanimously that shareholders vote FOR the proposals being considered at the company's special meeting of shareholders.
• The company denies all allegations that any additional disclosure was or is required or material.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the company is facing lawsuits, it is taking proactive steps to address shareholder concerns and move forward with the merger. The supplemental disclosures provide additional transparency, but the lawsuits introduce uncertainty.

Positives

• Glatfelter is proactively addressing shareholder concerns by providing supplemental disclosures.
• The company is transparently providing additional information regarding the background of the transactions and the financial analysis conducted by J.P. Morgan.
• The Glatfelter Board received an update from King & Spalding that Berry had agreed to allow Glatfelter to accept a potential superior proposal prior to receipt of shareholder approval.

Negatives

• Glatfelter is facing lawsuits from shareholders alleging disclosure deficiencies, which could potentially delay or disrupt the merger.
• The company is incurring expenses to defend against these lawsuits and provide supplemental disclosures.
• J.P. Morgan's discounted cash flow analysis of Glatfelter indicated a range of equity values between $55 million and $245 million on a stand-alone basis.

Risks

• The proposed transaction could be terminated if certain events occur or if closing conditions are not satisfied.
• The Glatfelter shareholders may not approve the transaction proposals.
• Necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated or may be delayed.
• Potential litigation brought in connection with the proposed transaction could delay or disrupt the merger.
• The integration of the combined company could be more difficult, time-consuming, or costly than expected.
• Failure to realize the benefits expected from the proposed transaction.

Future Outlook

The document contains forward-looking statements regarding the expected timing, completion, and effects of the proposed transaction between Berry and Glatfelter, including future financial and operating results. These statements are subject to various risks and uncertainties, and actual results may differ materially.

Management Comments

• The Companys board of directors continues to recommend unanimously that you vote FOR the proposals being considered at the Companys special meeting of shareholders.
• The Company specifically denies all allegations that any additional disclosure was or is required or material.

Industry Context

The merger between Glatfelter and Berry Global's HHNF Business reflects a trend of consolidation in the nonwovens and hygiene films industry, as companies seek to achieve greater scale and efficiency. The transaction is similar to previous acquisitions by Glatfelter, such as the acquisition of Jacob Holm in July 2021 for $302 million at a 10.1x LTM EBITDA multiple.

Comparison to Industry Standards

• The FV / LTM EBITDA multiples for selected transactions involving Glatfelter range from 8.8x to 10.3x.
• Comparable transactions include Glatfelter's acquisition of Jacob Holm (10.1x) and Georgia-Pacific LLC (Europe Nonwovens) (10.3x).
• Other transactions in the industry include Bain Capital's acquisition of Ahlstrom-Munksj Oyj (9.9x) and Berry Global Group's acquisition of Avintiv Inc. (8.1x).

Legal Proceedings

• Kyle Williams v. Glatfelter Corporation, et al., was filed in the Supreme Court of the State of New York, New York County, asserting individual claims against the Company and the members of the Company's board of directors for negligent misrepresentation and concealment and negligence.
• Robert Wilhelm v. Glatfelter Corporation, et al., was filed in the Supreme Court of the State of New York, New York County, asserting substantially the same claims to those of the Williams Complaint.

Stakeholder Impact

• Shareholders are impacted by the potential merger and the related lawsuits.
• Employees of Glatfelter and Berry Global's HHNF Business are impacted by the potential integration of the two companies.
• Customers and suppliers of both companies are impacted by the potential changes in the combined company's operations.

Next Steps

• Glatfelter shareholders will vote on the proposed transaction at a special meeting.
• The company will continue to defend against the shareholder lawsuits.
• The parties will work to obtain the necessary regulatory approvals and satisfy the other closing conditions to complete the merger.

Key Dates