International Paper Drops Buyout Proposal For Smurfit Kappa
Zacks Investment Research | Jun 05, 2018 10:30PM ET
International Paper Company (NYSE:IP) has decided to cancel its proposal for the takeover of the Irish packaging company — Smurfit Kappa — due to lack of engagement from the latter’s management.
Memphis-based International Paper was given time until Jun 6 to make a binding offer for the buyout by the Irish Takeover Panel. The company confirmed that it has dropped its pursuit to acquire its Ireland-based rival.
It is worth noting that International Paper had made two takeover proposals in February and March, but both were rebuffed by Smurfit Kappa’s management, citing gross undervaluation. International Paper first valued Smurfit Kappa at €36.46 per share and the second at €37.54 per share or €8.9 billion.
Also, in May, International Paper decided not to put across a hostile bid to acquire Smurfit Kappa and stressed the importance of proceeding on an agreed basis. It suggested that the two entities should meet to discuss the potential of the combined firm.
Per Ireland's rules, International Paper will be barred from making fresh attempts to acquire Smurfit Kappa for the next 12 months.
Nevertheless, International Paper remains focused on executing its operational strategy, which will boost shareholders’ value in the future.
The company continues to restructure itself to transform into a core packaging company. M&As remain a key strategy to strengthen its long-term business proposition.
It is taking initiatives to improve its operating margins over time across the business. The stock has outperformed the Zacks Investment Research
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