Irish packaging giant Smurfit Kappa has rejected a 'highly opportunistic' takeover bid
The firm said the proposal from a US outfit didn’t reflect its true value.
IRISH PACKAGING GIANT Smurfit Kappa has turned down what it has dismissed as an “unsolicited and highly opportunistic” takeover approach.
In an announcement to the London Stock Exchange (LSE) this morning, the Dublin-based firm stated the takeover bid was made by US company International Paper.
The proposal involved a combination of cash and a minority holding in the combined business for Smurfit Kappa shareholders.
According to Smurfit Kappa, the offer was “carefully considered” but the board decided the deal was not in the company’s best interests.
Smurfit Kappa chairman Liam O’Mahony said the board unanimously rejected the unsolicited approach, which was “fundamentally opportunistic” and failed to reflect Smurfit Kappa’s true value.
“The board believes that it is in the best interests of all stakeholders for the group to pursue its future as an independent company, headquartered in Ireland, operating as the European and Pan-American leader in paper-based packaging.
“We strongly advise shareholders to take no action.”
In a note published by Goodbody stockbrokers, analyst David O’Brien said that the move by Smurfit Kappa makes strategic sense.
O’Brien added: “We note the strong language used by Smurfit Kappa’s board rejecting the approach, so we await International Paper’s response.”
Liam O'Mahony (centre)
Smurfit Kappa, which operates its paper-based packaging business across Europe and Pan-America, employs roughly 46,000 staff in 35 countries.
It recently announced a record earnings before tax of €1.2 billion for 2017 and revenue of €8.6 billion. Roughly three-quarters of the firm’s annual earnings came from its European operation.
The firm noted that the strong performance last year was down to a number of factors, including the substitution of plastic with paper-based packaging, a significant growth in e-commerce and a growing demand from discount retailers for shelf-ready packaging.
The board mentioned in this morning’s statement that the company plans to invest up to €1.6 billion to grow the company over the coming years.
