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The board of packaging company Smurfit Kappa (SKG) has rejected a revised proposal from International Paper.
Under the terms of the revised proposal, Smurfit Kappa shareholders would receive €25.3 (£22) in cash which would be reduced to €24.6 after payment of the final dividend of 64.5 cents and 0.3 new shares of International Paper common stock for each Smurfit Kappa ordinary share held by them.
The revised proposal would value each Smurfit Kappa share at €37.5, reduced to €36.9 when the final dividend is excluded.
Liam O’Mahony, chairman of Smurfit Kappa, said: “On 6 March, the Board of Smurfit Kappa unanimously rejected International Paper’s unsolicited and highly opportunistic proposal. The Revised Proposal does not offer Smurfit Kappa shareholders much more than compensation for the fall in International Paper’s share price since that date and again entirely fails to value the Group’s true intrinsic business worth and future prospects. We delivered a record performance in 2017 and underlying trading momentum has continued into 2018.
“Moreover, the revised proposal does not make strategic sense for Smurfit Kappa and its stakeholders. Smurfit Kappa has a distinct business model and culture as a customer-oriented, performance-led packaging leader and has already communicated a strong plan to accelerate development and performance with its 2017 year-end results.
The board unanimously reaffirms its belief that it is in the best interests of the group’s stakeholders for Smurfit Kappa to pursue its future as an independent company, headquartered in Ireland, operating as the European and Pan-American leader in paper-based packaging”
Morning update
On the markets in early trading this morning, the FTSE 100 moved 0.3% higher to 6,939.3pts
Early rises far today include M&S (MKS) up 0.2% at 268.8p, SSP Group (SSPG), up 0.6% at 615.5p, PZ Cussons (PXC), up 1% at 230,7p and AG Barr (BAG), ahead of tomorrow’s full-year results, up 2% at 642p,
Fallers include packaging business Smurfit Kappa Group (SKG), down 4% at 2,932p, DS Smith (SMDS), another packaging group, off 0.4% at 473p, Just Eat (JE), down 0.8% at 697.5p and Britvic, off 0.9% at 667p.
This week in the City
City news flow is slowing down as we head towards the Easter break.
Tuesday brings full-year results from Irn Bru maker AG Barr (BAG), while Tesco meat supplier Hilton Food Group (HFG) is scheduled to issues its own full-year results on Wednesday.
In the US, Boots owner Walgreens Boots Alliance (WBA) will issue its second quarter trading numbers on Wednesday.
In economic news, Tuesday sees the publication of the monthly CBI Distributive Trades Surveys.
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