The US firm vying to acquire FTSE 100 packaging firm DS Smith is reportedly close to announcing a formal offer for the company worth more than £5bn amid a brewing bidding war with UK paper giant Mondi.
The New York-listed giant International Paper and its advisers were aiming to reach an agreement on a recommended all-stock offer by the end of this week, according to a report by Sky News.
International Paper declined to comment on the report while DS Smith did not immediately respond to a request for comment when approached by City A.M.
The news comes after DS Smith agreed to a £5.14bn all-stock takeover deal with Mondi, its bigger UK rival, in principle last month, which could create a combined group worth more than £10bn.
At the time, some analysts suggested that Mondi’s valuation of DS Smith was too cheap and could leave room for a rival bid.
The speculation became reality later that month when International Paper gatecrashed Mondi’s deal with a £5.7bn takeover proposal.
Pressure is now on Mondi to consider whether to raise its offer. DS Smith confirmed last week that the UK Panel on Takeovers and Mergers has consented to extend the deadline to 23 April for Mondi to announce a firm intention to make an offer for the company.
International Paper announced last week that it would look for a secondary listing on the London Stock Exchange and retain a base in the City if it is successful in buying DS Smith.
Discussions of a potential takeover have boosted DS Smith’s share price, making it one of the best-performing stocks on the FTSE 100 so far this year.