Smurfit Kappa reiterates position on takeover approach
Smurfit Kappa has this morning reiterated its opposition to an €8.6bn takeover approach from US firm International Paper.
It follows a statement released last night by the US company, in which it said that Smurfit Kappa would be a good strategic fit for the Memphis-based group.
Smurfit Kappa said it in a statement today that it noted the announcement released by International Paper in relation to its “unsolicited and highly opportunistic” proposal that was made to the Smurfit Kappa board on February 23.
“The board of Smurfit Kappa has already carefully considered, with its financial advisers, the proposal in detail and has unanimously rejected it on the basis that it fails entirely to reflect the group’s superior prospects as an independent business and represents a valuation multiple significantly below recent comparable transactions,” said the Irish company in this morning’s statement.
International Paper insisted last night that the proposed takeover would be an "excellent strategic fit" that would create long-term value for both Smurfit Kappa and International Paper. The US firm said it was "disappointed" that its proposal was made public by Smurfit Kappa.
International Paper said its cash and shares proposal would equate to a total of €36.46 per Smurfit Kappa share, valuing the Irish firm at €8.6bn. But Smurfit Kappa's shareholders will certainly now anticipate an improved offer. International Paper said it remains "ready to engage" with Smurfit Kappa's board and its shareholders.
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Analysts have estimated that Smurfit Kappa’s valuation could be closer to €10bn.
Yesterday, Smurfit Kappa chief executive, Tony Smurfit, roundly rejected the approach from International Paper, saying that the Irish company’s board recognise that it has a “really fantastic future ahead”.
“The proposal that was given to us was so far away from anything that the board would even remotely consider, that they unanimously and unequivocally rejected it.
“The board mandate is to view what is put in front of us. What is put on front of us at this juncture is a proposal that is significantly below what we would even contemplate,” he said.
“Obviously, if there was another proposal, the board would examine with the same thoroughness that they’ve examined this one,” said Mr Smurfit.
“We’ve a responsibility to our stakeholders, and that means all stakeholders. That very much includes our own people. But own people are, I think, very happy in Smurfit Kappa. If there are other proposals, the board will obviously have to look at them in that context. That’s part of being a public company.”