The former Weyerhaeuser International Paper factory in Gdansk, Poland, on April 14, 2019.
Michal Frudra | Noor Photos | Getty Images
DS Smith Confirmed on Tuesday that it was working with international paper The all-stock takeover bid by the US-listed company values the British paper and packaging company at 5.72 billion pounds ($7.22 billion).
Under the terms of the proposal, DS Smith shareholders will receive 0.1285 International Paper shares for each DS Smith share held. If the proposed transaction goes through, DS Smith shareholders will own approximately 33.8% of the combined company.
The terms of the proposal represent a value of 415 pence per share in DS Smith, based on International Paper’s closing price of $40.85 on Monday, the British company said.
DS Smith said: “The board recognizes the strategic advantages and value creation potential of a merger with International Paper. The board is therefore in discussions with International Paper regarding the proposal.”
At the beginning of this month, World Championship Agreed in principle to acquire DS Smith in an all-share tender offer of £5.14 billion. The terms of the deal mean that each DS Smith share has an implied value of 373p, with Mondi shareholders owning 54% of the enlarged Mondi Group.
International Paper’s offer represented a 48% premium to DS Smith’s closing price on February 7, the day before larger rival Mondi announced its preliminary bid.
Mundy did not immediately respond to Reuters’ request for comment.
International Paper shares fell about 8.5% in afternoon trading.
Sky News first reported deal talks between DS Smith and International Paper on Tuesday.
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