Shares at Smurfit Kappa have spiked at a record high this week as investors speculate that International Paper will make a third takeover bid, according to the Irish Times.
The Irish multinational packaging company’s shares rose up 4.8% to €37.14 on Monday (28 May), valuing the group at €8.8 million before settling at a lower 3.4% rise (€36.64).
The Times added that the board of the Irish company could face a shareholder revolt if it does not engage with the US paper packaging firm.
Back & Forth
Smurfit Kappa has rejected IP twice already this year in February and March, saying that the US group has failed to value its “intrinsic business worth and future prospects”.
According to the Irish Times, almost 20% of Smurfit Kappa’s shareholders have indicated to top-three shareholder, Janus Henderson, that they are supportive of the deal and have publicly called on the company to engage in talks with IP.
“The pressure is increasing on the Smurfit Kappa board, but we hope it won’t come to [an egm] showdown,” a fund manager who holds the stock told the Irish Times.
A spokesman for IP said, “We have been consistent in our view that engagement is the path to unlock value and that the board of SKG has nothing to lose from such engagement.” He declined to say if the company was planning another bid.
Now Or Never
Earlier this month IP said that they would not proceed with a third bid unless it is recommended by Smurfit Kappa's board of directors. This was announced after the Irish Takeover Panel gave the group until June 6th to make a third binding offer.
If no bid goes through by this date, the US group will be banned from making another bid for 12 months.
IP adjusted its terms to offer Smurfit shareholders a "mix and match" facility that could allow them to receive a greater or lesser proportion of cash or shares, and it suggested that the two companies should meet to discuss the potential for the combined company.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.