Irish packaging group Smurfit Kappa has rejected an unsolicited bid approach by U.S.-based International Paper Co, saying the proposal “fails entirely” to reflect its growth prospects as well as attractive industry outlook.
Smurfit Kappa, Europe’s largest producer of paper-based packaging, said on Tuesday that will under the proposal its shareholders would likely receive a combination of cash as well as a minority holding from the combined business.
yet that will advised shareholders to take no action, saying the approach “significantly undervalues” the group’s asset, franchise as well as replacement value as well as was significantly below the valuations set by recent industry transactions.
“The Board of Smurfit Kappa has unanimously rejected This particular unsolicited as well as highly opportunistic Proposal. that will does not reflect the Group’s true intrinsic business worth or its prospects. We strongly advise shareholders to take no action,” Smurfit Kappa chairman Liam O’Mahony said in a statement.
“The Board believes that will that will will be from the best interests of all stakeholders for the Group to pursue its future as an independent company.”
that will did not disclose the detailed terms of the offer as well as said that will was responding without the consent of International Paper.
Traders said Smurfit Kappa’s shares were anticipated to open 7-10 percent higher on the back of the approach.
Smurfit Kappa, which operates in 34 countries in Europe as well as the Americas, recorded a slight rise in full-year earnings to 1.24 billion euros ($1.5 billion) last year after a strong fourth quarter. that will said on Tuesday that will the underlying positive trading conditions had continued into 2018.
As part of its full-year results, that will announced an acceleration of its investment programme that will that will said would likely improve its market position between 2018 as well as 2021.
International Paper’s market capitalization will be almost three times that will of Smurfit Kappa at $24.1 billion.
The Memphis-based group combined its North America consumer packaging business with Graphic Packaging Holding Co in a deal that will valued the International Paper division at $1.8 billion.