Packaging giant Mondi has walked away from a bidding war for its smaller rival DS Smith, paving the way for Memphis-based International Paper to snap up the firm in a £5.8bn deal.
In a statement to the market today, Mondi said it had decided a counter bid for DS Smith “would not be in the best interest of shareholders” in a move which sent its shares surging beyond nine per cent.
“Accordingly, Mondi does not intend to make an offer for DS Smith,” the firm said to the market.
DS Smith‘s crashed by more than 12 per cent on the news.
The Amazon box-maker has been the subject of a bidding war since initially backing a £5.2bn bid from Mondi. Those plans were disrupted by a counter-bid from the US based International Paper which launched a counter bid for the firm earlier this month.
The US firm has said it would make DS Smith’s London headquarters its European base and would seek a secondary listing on the London Stock Exchange should its deal get the go ahead.
Speaking about the tie-up earlier this week, Chief Financial Officer Tim Nicholls said the company does not anticipate “major regulatory issues” and that any hurdles “would be minimal, if anything,” Bloomberg reported.