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TOP NEWS: Mondi pulls out of DS Smith takeover race

19th Apr 2024 12:22

(Alliance News) - Mondi PLC on Friday said it does not plan on making an offer for DS Smith PLC, as the tussle for the FTSE 100 listed firm took another turn.

Mondi shares were up 9.0% to 1,500.92 pence each in London on Friday around midday. In Johannesburg, shares were up 0.3% to ZAR32,658.00.

Shares in DS Smith, the London-based paper and packaging company, plummeted 10% to 358.00p in London.

In early March, DS Smith and Mondi agreed to an in principal takeover deal, which valued DS Smith shares at 373 pence each.

On Friday, Mondi said it has considered the value of the takeover to its shareholders, and based on this, has decided against the transaction.

"Mondi's board remains confident that its compelling portfolio of sustainable packaging and paper products, scale and cost advantaged quality asset base, along with its pipeline of organic investments, ensure it is well positioned to deliver long-term structural growth in the markets in which it operates, delivering strong cash generation, attractive returns and sustainable value accretive growth for shareholders," Mondi said.

On Tuesday, DS Smith accepted an takeover approach from International Paper Co, a Tennessee-based pulp and paper supplier.

The offer will see DS Smith shareholders receive 0.1285 International Paper shares for every one held in DS Smith. The bid values DS Smith at around GBP5.8 billion on a fully diluted basis, and its enterprise value at around GBP7.8 billion.

Shares in International Paper had closed 0.6% higher at USD35.26 in New York on Thursday.

By Sophie Rose, Alliance News senior reporter

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