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A New York-listed paper producer is mobilising to gatecrash a £5.1bn takeover of DS Smith, the British-based packaging group.
Sky News understands that International Paper has indicated to DS Smith that it wants to launch a formal counterbid to trump an agreed offer from DS Smith by Mondi, another London-listed paper group.
If it does proceed with a formal offer – which is expected to comprise a large stock-based component – it would set the stage for a multibillion-pound transatlantic bidding war for DS Smith.
Mondi announced in February that it was exploring an offer for its smaller competitor, and this month the two companies said they had reached agreement on a deal valuing DS Smith at an implied 373p-a-share.
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Some shareholders and analysts have argued that the Mondi proposal is too cheap and leaves the door open to a rival.
It would be the latest London-listed company to become the subject of a bidding war, after Wincanton, the logistics group, and Currys, the electrical goods retailer, although the latter rapidly fizzled out.
City insiders said on Tuesday that International Paper might already have submitted an indicative proposal to DS Smith and its advisers.
The value of any such offer from International Paper was unclear, however, with industry bankers saying only that it was likely to have been pitched at north of 400p-a-share and potentially at about 420p-a-share.
The prospect of a bidding war for DS Smith, whose long-serving chief executive, Miles Roberts, recently announced plans to retire, comes amid a wave of industry consolidation.
Last year, the Irish group Smurfit Kappa agreed a $20bn deal with WestRock of the US to create the world’s biggest paper and packaging group by sales.
Corporate activity in the sector is being driven by the opportunity to extract synergies after a period of rising input prices.
Under the deal with Mondi, DS…
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