TOP NEWS: Smurfit Kappa Reiterates Rejection Of US Takeover Approach

7th Mar 2018 08:54

LONDON (Alliance News) - FTSE 100-listed packaging firm Smurfit Kappa PLC said on Wednesday it has advised shareholders to take no action concerning the "unsolicited and highly opportunistic proposal" by International Paper Co.

On Tuesday, Smurfit Kappa said it had rejected a takeover approach from the US company, later revealed to have been a EUR8.6 billion cash and stock offer made on February 23. Under the International Paper offer, Smurfit shareholders would receive EUR22.00 in cash and 0.3028 International Paper of a share for each Smurfit share, which values Smurfit shares at EUR36.46 each, or EUR8.65 billion in total.

This represents a 27% premium to Smurfit's closing share price of EUR28.62 on Monday in Dublin, and a 30% premium to Smurfit's closing share price of EUR28.00 on February 13, the last business day prior to International Paper's initial approach to Smurfit.

Shares in Smurfit Kappa were up 3.6% at 3,152.00 pence on Wednesday in London.

"The board of Smurfit Kappa has unanimously rejected this unsolicited and highly opportunistic proposal. It does not reflect the group's true intrinsic business worth or its prospects. We delivered a record performance in 2017 and underlying trading momentum has continued into 2018. The group has a proven management team which we believe will deliver significantly greater value for shareholders on a stand-alone basis," said Chairman Liam O'Mahony on Tuesday.

Later on Tuesday, International Paper said it "remains ready to engage with Smurfit Kappa's Board and shareholders to discuss both the merits of its proposal and the reasons why International Paper believes it provides the best near and long term value for Smurfit Kappa shareholders".

"The board of Smurfit Kappa has already carefully considered, with its financial advisers, the Proposal in detail and has unanimously rejected it on the basis that it fails entirely to reflect the group’s superior prospects as an independent business and represents a valuation multiple significantly below recent comparable transactions," Smurfit Kappa added on Wednesday.

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