Smurfit Kappa rejects takeover approach from International Paper
Europe’s largest cardboard box maker calls the proposal ‘highly opportunistic’
Europe’s largest cardboard box maker Smurfit Kappa has rejected an unsolicited cash and share offer from International Paper of the US, describing the approach as “fundamentally opportunistic and conditional”.
The Dublin-based company did not disclose the value of the bid but said the proposal “fails entirely to reflect the group’s strong growth prospects and attractive industry outlook”. Smurfit Kappa’s enterprise value is about €9.8bn, according to FactSet data.
A statement from Smurfit Kappa said the proposal comprised “a combination of cash and a minority holding in the combined business”. International Paper is the world’s largest paper and pulp company.
Liam O’Mahony, chairman of Smurfit Kappa, said
The board of Smurfit Kappa has unanimously rejected this unsolicited and highly opportunistic proposal. It does not reflect the group’s true intrinsic business worth or its prospects.
He added that the company had a “proven management team which we believe will deliver significantly greater value for shareholders on a standalone basis”.
Smurfit Kappa was created by Jefferson Smurfit’s 2004 merger with Dutch rival Kappa Industries, the new company returned to the market in 2007 after a period owned by Madison Dearborn, the US private equity company.
The company, which is headed by Tony Smurfit, grandson of the founder, announced record earnings before interest, tax, depreciation and amortisation for 2017 of €1.24bn and said it would accelerate an investment programme to “improve its market position”.
International Paper did not comment.