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Paper Recycling March 26, 2018 03:30:01 PM

Smurfit Kappa Publicly Rejects IP's Revised Takeover Offer

Paul Ploumis
ScrapMonster Author
Under the terms of the proposal, International paper has offered €25.25 in cash and 0.3028 new International Paper shares for each Smurfit Kappa ordinary share held by them.

Smurfit Kappa Publicly Rejects IP's Revised Takeover Offer

SEATTLE (Scrap Monster):  International Paper is believed to have submitted a revised proposal to acquire the assets of paper-based packaging major Smurfit Kappa. The earlier unsolicited offer made by the company was rejected by Smurfit Kappa, calling it ‘fundamentally opportunistic. Subsequent to disagreeing with the characterization of its proposal as opportunistic, International Paper has now come up with a revised proposal.

The revised proposal to acquire the entire issued and to-be-issued share capital of Smurfit Kappa was submitted on 22 March, 2018, following several attempts to enter into discussions. Making the public announcement, International Paper noted that the revised proposal offers the best immediate and long term value for Smurfit Kappa shareholders. Accordingly, International Paper expressed its willingness to engage in constructive negotiations with Smurfit Kappa in achieving the proposed deal, it added.

ALSo READ: International Paper Augments Investment at Riverdale Mill to $552 Million

Under the terms of the proposal, International paper has offered €25.25 in cash and 0.3028 new International Paper shares for each Smurfit Kappa ordinary share held by them. This is equivalent to 15% increase in cash component in comparison with the earlier proposal made on March 6. By way of that proposal, the company had offered had offered €22 cash and 0.3028 new International Paper shares for every Smurfit Kappa share, leaving the Smurfit kappa shareholders with a 15% stake in the combined entity.

Commenting on the revised proposal, Mark Sutton, Chairman and CEO of International Paper said the company’s existing shareholders will benefit from the synergies of the combination. The acquisition is a strategic fit, as both companies share many common characteristics and beliefs. Together, the companies would form a global leader in premier packaging solutions, Sutton added.

Meantime, reports indicate that Smurfit Kappa has publicly rejected the revised proposal too, without any engagement.

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