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International Paper beats Mondi offer in DS Smith bidding war

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International Paper Company has reached an agreement with UK rival DS Smith to acquire it for £5.8bn, beating out the deal offered by competitor Mondi in the bidding war.

Under the terms of the deal, DS Smith shareholders will receive 0.1285 International Paper shares.

This will leave DS Smith shareholders owning around a third of the business. According to a statement from the company, the terms value the company at 415p a share based on March 25 prices. DS Smith currently sits at 400p a share.

Last month, Mondi moved to make an offer for DS Smith, valuing the business for £5.1bn in an in-principle deal.

At the time, some analysts suggested that Mondi’s valuation of DS Smith was too cheap and could leave room for a rival bid.

However, it was then revealed that DS Smith had also entered into talks with International Paper, leaving a deadline for the firm to make an offer by 23 April.

Mondi still has time to present a counter-offer to International Paper’s offer.

The move is the latest in a series of consolidations and acquisitions in the UK market, with many companies dropping off the listed market in favour of private hands, either abroad or at home.

DS Smith’s stock price was down 2.3 per cent this morning on the news but is still up 18 per cent in the last month after receiving a significant spike following the initial news of an International Paper offer.

International Paper’s stock price is up 4.4 per cent in the last month.

Last month, International Paper said that it would look for a secondary listing on the London Stock Exchange and retain a base in the City if it is successful in buying DS Smith.