Smurfit Kappa braces for last-ditch bid from International Paper
This week could be a momentous one for cardboard packaging company Smurfit Kappa, which is currently the target of one of the biggest live takeover bids in the FTSE 100.
The business, which tore up an €8.9bn (£7.8bn) takeover bid in March from US packaging firm International Paper (IP), could have to fend off one last takeover attempt as the deadline for its suitor to make a final bid approaches.
Memphis-based IP, whose advances have so far been rejected by Smurfits boss Anthony Smurfit as “fundamentally undervaluing” the business, has until Wednesday to either lay a final bid on the table or be banned from approaching the company for another year.
Read more: FTSE 100 round up: Smurfit Kappa and Kingfisher among biggest risers
However, City sources have speculated that a rival bid could be in the pipeline, as City A.M. understands that FTSE 100-listed Mondi has also appointed bankers to explore further deals.
Smurfit has been urged by a number of its investors, including asset manager Janus Henderson, to hold talks with IP, but has so far refused.
“The board is resolute in its belief that the best interests of the groups stakeholders are served by pursuing its future as an independent company,” said the business, which operates in 35 countries.
Janus Henderson has indicated that it would not support an offer below €40 per share. IPs last increased offer was of €25.25 in cash and 0.3 IP shares, which gave a combined total of around €37 per share.
Read more: Smurfit Kappa has just rejected another approach from International Paper
However some analysts have warned that IP should be wary of scaling up its offer too much, since it might not be able to make the necessary savings from the deal.
“One of the primary concerns investors have had since the news about IPs initial approach broke was that the synergy opportunities werent obvious given the lack of geographic overlap,” said KeyBanc Capital Markets analyst Adam Josephson.
Smurfits shares climbed almost 27 per cent on news of the original bid.
The Irish company also completed its own €460m deal last month in an attempt to detract from the siege.
It announced it had agreed to acquire Reparenco, a paper business in the Netherlands which owns a 675,000 tonne capacity mill.
Online shopping has helped to boost demand for packaging businesses such as Smurfit, and those such as US-headquarterd IP have been looking to wangle a larger foothold in the booming European market.
Read more: Under-siege cardboard company Smurfit Kappa completes €460m deal
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