Home Estate Planning DS Smith takeover battle set to erupt as US paper firm mulls offer

DS Smith takeover battle set to erupt as US paper firm mulls offer

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A US-listed paper producer has thrown a spanner into the works of Mondi’s takeover of DS Smith, with a potential £5bn-plus bid of its own for the London-listed packaging maker.

In a statement to the stock market this afternoon, DS Smith said it was in talks with Memphis-based International Paper Company regarding an all-share offer that could now trigger a bidding war for the company.

The packager’s larger rival Mondi launched a £5.1bn bid for the firm in February in a deal which would create one of the world’s largest packaging manufacturers.

However, bosses at DS Smith said they were now continuing discussions with both bidders.

“The board acknowledges the strategic merits and potential for value creation through a combination with International Paper,” DS Smith said in a statement. “Accordingly, the board is progressing its discussions with International Paper regarding the proposal.”

Under the terms of the mooted deal, DS Smith shareholders would receive 0.1285 shares in International Paper for each share, meaning they would own around 33.8 per cent of the combined group. 

There can be “no certainty as to whether any offer will be made by International Paper” or what the terms of an offer may be, DS Smith added. International Paper will now need to table a firm bid for the company by 5pm on 23 April 2024.

Sky News reported earlier that International Paper was preparing a bid, which would value the firm at north of £5bn.

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