27 March 2024
If you are covering International Paper's informal discussions for an all-share offer to acquire DS Smith, please see the following comment from Jamie Maddock, equity research analyst at Quilter Cheviot:
“In a move that has stirred the market post-close on 27 March, International Paper has entered the spotlight with its informal discussions for an all-share offer to acquire DS Smith. While no concrete proposal has been tabled, the potential for a deal has not been ruled out.
“DS Smith’s management, recognising the strategic alignment, has shown a willingness to engage further with International Paper, even as it keeps channels open with Mondi. The proposed terms suggest a compelling offer from International Paper at 415p per share, marking a significant 48% premium over the undisturbed price on 7 February 2024, and an 11% edge over Mondi’s informal bid.
“Despite a slight dip in International Paper’s share price following the announcement, DS Smith’s market performance has seen a bullish uptick, trading above Mondi’s offer. With a deadline set for 23 April for International Paper to formalise its intentions, the market awaits with bated breath, even as Mondi’s 4 April deadline looms.
“The valuation metrics paint a picture of strategic manoeuvring, with International Paper leveraging its premium relative market standing to potentially outbid Mondi. The market’s eyes are now fixed on the unfolding drama of this potential acquisition, as International Paper positions itself for a potential strategic expansion in the European packaging industry.”
