International Paper Makes a $7 Billion Offer To Buy Out DS Smith Of Britain

(CTN News) – As of Tuesday, DS Smith confirmed that it was in talks with International Paper about an all-stock offer that the U.S.-listed company had made to the British paper and packaging company for a valuation of 5.72 billion pounds ($7.22 billion).

According to the proposal, shareholders of DS Smith would receive 0.1285 shares of International Paper for every share they own in DS Smith under the terms of the deal. It is expected that DS Smith shareholders will own around 33.8% of the combined company as a result of the proposed deal.

Based on International Paper’s closing price of $40.85 on Monday, the proposal’s terms would represent a value of 415 pence per share for DS Smith, based on the closing price of International on Monday.

There is no doubt that a combination with International Paper presents significant strategic merits and also holds promise for value creation in the long run. So, in light of the above, we are proceeding with our discussions regarding the Proposal with International Paper,” DS Smith explained.

This month, Mondi announced it had reached an agreement in principle for the purchase of DS Smith for a total of 5.14 billion pounds, in an all-share offer. According to the terms of that deal, DS Smith shares were valued at 373 pence per share, with Mondi shareholders owning a 54% stake in the enlarged Mondi group after the deal was struck.

According to DS Smith’s closing price on February 7, the day before stronger rival Mondi announced its preliminary offer, International Paper’s offer would represent a premium of 48 percent over DS Smith’s closing price.

To date, it has not received a response to its inquiry in regards to a comment made by a media outlet to Mondi in response to an inquiry it made about the comment.

As of the afternoon trading session, International Paper’s shares are down about 8.5% from their afternoon highs.

Sky News reported on Tuesday that DS Smith was in talks with International Paper regarding a possible partnership.

SEE ALSO:

Alibaba Scraps Cainiao’s IPO, Announcing It Will Own The Entire Company