Key Takeaways:
Mill Pond Capital, owning about 3 percent of Rayonier Advanced Materials Inc., publicly urged the board to sell the company after it rejected a 100 percent premium acquisition offer.
"The problem has never been the assets," Daniel Farb, managing member at Mill Pond Capital, said in a letter to the board dated June 17. "Seven-plus years of evidence has made clear that the combination of capital structure, overhead burden, rotating management, and a misaligned Board cannot unlock the significant asset value embedded within RYAM."
RYAM has reported a loss from continuing operations every year since 2019 and has cycled through three chief executive officers, currently having no permanent CEO. A dollar invested in RYAM at its June 2014 spin-off is worth less than $0.25 today, compared with nearly $5.00 for the same investment in the S&P 500 with dividends reinvested, Farb said. The company carries about $55 million to $60 million in annual corporate overhead, a fixed cost that a strategic acquirer with an existing platform could largely eliminate, he added.
In November 2025, a credible buyer offered $11 to $12 per share for RYAM, representing roughly a 100 percent premium to the prevailing stock price, according to the letter. The board rejected the proposal, and the offer was disclosed not by the company but by the buyer in a securities filing earlier this year. In January 2026, RYAM named a new CEO who resigned after just over 100 days. The board paid its directors more than $1.3 million in total compensation in 2025, while those same directors purchased fewer than 80,000 shares in the open market over their collective tenures, Farb said.
RYAM's assets include specialty cellulose operations serving pharmaceutical, food, filtration and performance materials markets. The company trades at a fraction of their multi-billion-dollar replacement cost, Farb said, arguing that at least one credible acquirer has expressed serious interest. The board launched a strategic review in April after the CEO's departure.
The activist pressure puts the board in a difficult position after it already rejected a full-premium offer. RYAM shares closed at $8.96 on June 16, up 52 percent year to date but still well below the $11-to-$12 range the rejected bid implied. Investors will watch for any update on the strategic review, which the company said in April would explore a range of alternatives including a sale.
This article is for informational purposes only and does not constitute investment advice.
