19th Jun 2018 08:06
LONDON (Alliance News) - DS Smith PLC said Tuesday it will raise GBP1 billion via a rights issue of shares to part fund its previously announced GBP1.45 billion acquisition of European packaging business Papeles y Cartones de Europa SA, commonly known as Europac.
The FTSE100 listed packaging company intends to issue 293.1 million new shares pursuant to a 3-for-11 rights issue at 350 pence per new share. The issue price represents a 31% discount to the stock's closing price on Monday of 549.60p. DS Smith shares opened down 2.6% at 535.20p on Tuesday.
The rights issue is fully underwritten by Citigroup Global Markets Ltd, Goldman Sachs International and JP Morgan Cazenove. The issue represents 27% of the existing share capital of DS Smith and 21% of the enlarged capital.
DS Smith earlier in June announced the acquisition of Europac for EUR16.80 per Europac share, valuing the entire share capital of Europac at EUR1.67 billion, with an implied enterprise value - including debt - of EUR1.90 billion.
On Monday, DS Smith reported a rise in in profit and revenue for the 2018 financial year on the back of strong volume growth, higher sales prices and contribution from acquisitions
The company recorded pretax profit of GBP292 million for the 12 months to April 30, up 21% from GBP264 million in the year ago period, on a revenue of GBP5.76 billion and GBP4.78 billion, respectively.
Profit, before tax and exceptional items, grew 21% to GBP473 million from GBP391 million.
DS Smith declared a final dividend of 9.8 pence per share, down from 10.6p paid a year ago. Total payout for the 2018 financial year stood at 14.7p, down from 15.2p paid a year ago.
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