TOP NEWS: Smurfit Kappa Rejects Revised International Paper Offer

26th Mar 2018 08:02

LONDON (Alliance News) - Paper and packaging firm Smurfit Kappa PLC on Monday said it has received a revised takeover offer from the International Paper Co - the New York-listed firm having made an approach earlier in March - which it has again rejected.

Under International Paper's revised offer, Smurfit shareholders would receive EUR25.25 in cash, and 0.3028 of a new share in International Paper.

Based on International Paper's closing price of USD50.15 on Friday, this would value each Smurfit share at EUR37.54 compared to EUR36.46 under the previous offer. The revised proposal represents an increase in value of only EUR1.08 per share, Smurfit said, equivalent to less than 3%.

With 236.9 million shares in issue, the new offer would value Smurfit at EUR8.89 billion. Smurfit has a market capitalisation of EUR8.23 billion based on Friday's closing price of EUR34.74 for its Irish-listed shares.

Following "careful consideration", the board unanimously rejected the new offer. Smurfit said it is "resolute" in its belief that the best interests of the group's shareholders are served by pursuing its future as an independent company.

The company said the offer continues to include a "significant proportion" of the consideration in the form of International Paper shares which are US-listed, represent uncertain value, and would expose Smurfit shareholders to the risk of significantly greater leverage and the challenges of integrating two businesses with "fundamentally different cultures".

"The revised proposal does not offer Smurfit Kappa shareholders much more than compensation for the fall in International Paper's share price since that date and again entirely fails to value the group's true intrinsic business worth and future prospects. We delivered a record performance in 2017 and underlying trading momentum has continued into 2018," said Smurfit Chairman Liam O'Mahony.

"The board unanimously reaffirms its belief that it is in the best interests of the group's stakeholders for Smurfit Kappa to pursue its future as an independent company, headquartered in Ireland, operating as the European and pan-American leader in paper-based packaging," O'Mahony added.

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