Scrap Monster
Olympus-ims.com
Vulcan
Paper Recycling March 07, 2018 10:30:34 AM

International Paper Disagrees With Smurfit Kappa's Rejection of Takeover Bid

Paul Ploumis
ScrapMonster Author
Meantime, International Paper Company, in a statement, noted that the company did not agree with the characterization that its proposal was opportunistic.
International Paper Disagrees With Smurfit Kappa's Rejection of Takeover Bid

SEATTLE (Scrap Monster): Paper-based packaging major Smurfit Kappa has rejected the takeover proposal by International Paper Company. Rejecting the unsolicited offer, Smurfit Kappa described it as “fundamentally opportunistic”.

International Paper had approached Smurfit Kappa on February 14th to arrange a meeting between company officials. Following this, a meeting was convened on 23rd February, during which the proposal along with a written letter to the Board of Directors was presented. The Smurfit Kappa Board rejected the proposal in its meeting last night.

ALSO READ: Smurfit Kappa Announces Opening of New Hi-Tech Paper Recycling Plant

According to Liam O’Mahony, chairman, Smurfit Kappa, the board had no hesitation whatsoever to unanimously reject the proposal, as it does not reflect the group’s true worth or its business prospects. Further, the offer significantly undervalues the group’s assets, franchise and replacement value, the Board noted. Further, the Board reiterated that the group will pursue its future as an independent company and urged its shareholders to take no action. It must be noted that the company had reported record performance in 2017, with revenues surging by almost 5% during the year.

Meantime, International Paper Company, in a statement, noted that the company did not agree with the characterization that its proposal was opportunistic. It added that the proposal was made after taking into consideration of Smurfit Kappa’s recently released financial results and the sector’s medium term outlook. The transaction, if concluded, would have been an excellent strategic fit that would have created long-term value for both the companies, the company statement said.

Under the terms of the proposal, International Paper had offered €22 cash and 0.3028 new International Paper shares, which in turn could have left Smurfit Kappa shareholders with a 15% stake in a combined company.

SM Newsletter
Subscribe to SM mailing list and get updates to your inbox