Who will secure DS Smith?

The paper packaging industry awaits a final decision in the coming days over which of two suitors will finally claim the major UK concern DS Smith.

In March, the boards of Mondi and DS Smith agreed a £5 billion (EUR 5.8 billion) which Mondi said gave it an ‘exciting opportunity’ to become Europe’s leader in sustainable packaging.

US interest

But on 16 April the US-based International Paper (IP) agreed an all-share deal to buy DS Smith, valuing the British packaging firm at £5.8 billion. DS Smith shareholders would own around one-third of the combined company and International Paper shareholders would own the rest.

However, Bloomberg has reported the offer was worth less than Mondi’s after a recent sell-off in IP’s shares.

Under the initial offer, Mondi shareholders would own 54% and DS Smith shareholders 46% of the Mondi share capital. It represented an implied value of 373 pence per DS Smith share and a premium of 33% on the share price the day before the Mondi approach.

The two suitors earlier had a deadline of 23 April to make a firm offer or walk away. Mondi has yet to comment.