Irish packaging firm Smurfit Kappa has rejected an increased takeover offer of €9.5bn ($11.7bn) from the US-based International Paper.
Earlier this month, Smurfit Kappa rejected International Paper's €8.6bn ($10.6bn) takeover offer.
Under the revised proposal, International Paper agreed to pay €25.25 per share in cash and 0.3028 shares of its common stock for each Smurfit Kappa ordinary share held by them.
According to International Paper, the revised proposal values each Smurfit Kappa ordinary share at €39.71, representing premium of about 38.7% to its closing share price of €28.62 on 5 March.
Smurfit Kappa said the revised proposal represents an increase in value of only €1.08 per share, equivalent to less than 3%
Smurfit Kappa chairman Liam O’Mahony 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.”
International Paper chairman and CEO Mark Sutton said: “We view our Revised Proposal as attractive for both sets of shareholders. Smurfit Kappa shareholders will benefit from an attractive premium with a combination of cash up front and will have the opportunity to participate in the future value creation of the combined business.”
Smurfit Kappa offers packaging solutions for the food and drink, consumer good and industrial sectors.
The company’s product portfolio includes container board, paper and board solutions, as well as packaging machinery solutions.
With around 46,000 employees across 35 countries, Smurfit Kappa reported sales of around €8.6bn in 2017.
With manufacturing operations in North America, Latin America, Europe, North Africa, India and Russia, International Paper produces renewable fiber-based packaging, pulp and paper products.
The company, which produces corrugated packaging products, has reported sales of around $22bn for the year 2017.
Image: International Paper's global headquarters. Photo: courtesy of International Paper Company.