Badger Paper Mills says acquisition deal terminated

PESHTIGO, Wis. , October 25, 2005 (press release) – Badger Paper Mills, Inc. ("Badger Paper Mills" or the "Company"), manufacturer of flexible packaging and specialty papers, today announced that the previously announced letter of intent with James D. Azzar, providing for the acquisition of Badger Paper Mills through a merger has been terminated. Badger Paper Mills also announced that it has terminated its registration under the Securities Exchange Act and has taken action to delist its common stock from The Nasdaq Small Cap Market.

Termination of Merger Negotiations

Under the terms of the Azzar letter of intent, Badger Paper Mills' shareholders would have received $1.25 in cash per share of Badger Paper Mills common stock. Following protracted negotiations with Mr. Azzar, however, the parties were unable to finalize a definitive agreement.

Deregistration of Badger Paper Mills

Badger Paper Mills also has deregistered as a reporting company with the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934. Badger Paper Mills expects the deregistration to become effective within 90 days of the filing with the SEC. As a result of the filing, Badger Paper Mills' obligation to file with the SEC certain reports and forms, including Forms 10-K, 10-Q, and 8-K, will be immediately suspended and upon effectiveness will cease. In connection with the deregistration, Badger Paper Mills also is taking action to have its common stock delisted from The Nasdaq Small Cap Market.

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