In addition to Mondi, International Paper is also showing interest in acquiring the British recycling, paper, and corrugated packaging group DS Smith.
DS Smith has confirmed recent media speculation about a takeover proposal received from the US paper and packaging giant International Paper (IP). According to DS Smith and IP, the two companies are in discussions regarding IP's proposal to acquire DS Smith through a possible all share offer.
DS Smith's Board of Directors acknowledged "the strategic merits and potential for value creation through a combination with International Paper." The board was therefore progressing its discussions with International Paper regarding the proposal, but there was no certainty as to whether any offer will be made or the terms of any such offer from IP, DS Smith announced.
Under the terms of the proposal, DS Smith shareholders would receive 0.1285 shares in IP for each share they own in DS Smith, resulting in DS Smith shareholders owning approximately 33.8 per cent of the combined group, the companies said. Based on the International Paper share price of $40.85 at close of business on 25 March 2024, the offer values DS Smith at £4.15 per share and represents a premium of 48 per cent to DS Smith's closing share price of £2.81 on 7 February 2024, that is, the day before the news on Mondi's potential offer for DS Smith reached the market.
Despite the takeover proposal received by IP, DS Smith is also continuing discussions with Mondi, regarding a possible takoever. Only recently, Mondi and DS Smith had reached an agreement in principle on the key financial terms of a possible all share offer by Mondi for DS Smith.
In contrast to IP, Mondi is offering DS Smith shareholders a 46 stake in the combined Mondi-DS Smith group. The deal values DS Smith shares at £3.73 and represents a premium of 33 per cent to DS Smith's closing share price from 7 February 2024, according to the two companies.
