Smith (ds) Share Discussion Threads

[alotto] 23/4/2024 16:56

I originally bought for 300 and sold short of 400p. Bought back in at 350. Provided all cost savings and sinergies work out in a scenario of a merger, the share price for smds could even go back to the equivalent of 500p.

[jeffian] 23/4/2024 16:44

As stated previously, the 'value' of the merger was always going to be a moveable feast and only relevant at the time the deal was struck for the purpose of establishing what proportion of the combined entity would be held by each group of shareholders. Anyone looking to cash out is probably kicking themselves for not selling in the market when SMDS went over £4, but for those staying in, the proportion/dilution of their holding is not going to change as the ratio is fixed.

[laurence llewelyn binliner] 23/4/2024 16:35

IP down from USD41 to 34 since the SMDS bid, how much will they need to dilute existing shareholders in their all paper offer...?

[alotto] 23/4/2024 16:08

Tomorrow IP is releasing their financial statement for the period. I will see you all tomorrow afternoon then! It will be interesting.

[sharw] 23/4/2024 15:12

Yes, the price of SMDS will track IP for the next 8 months or however long.

Before anyone asks, the magic formula is:

IP x 0.1285 x ER

IP is the share price of IP in cents that you can find here

ER is the exchange rate from here:

So with IP 3420 at the moment (15.12) and ER 0.81 we get 358p (offer is 349)

[chopp1] 23/4/2024 11:20

Suddenly the deal with IP looks unattractive given how the IP share price has slumped. Can only hold and hope it improves.

[moorsie2] 22/4/2024 12:26

IP results out this Week (Thursday I think)

Should provide a real boost in Sp

Also PCA in USA are reporting

[pj fozzie] 21/4/2024 21:31

Hi sharw,

Unfortunately, I find the rns ambiguous. I understand that a secondary london listing is planned, but it's not clear to me where the 642 shares I'll end up with, will be listed. I assume NYSE but hope for LSE.

Cheers,
PJ

[sharw] 20/4/2024 10:19

pj fozzie - read the RNS - 7th para

[ygor705] 20/4/2024 09:12

Not surprised at yesterday's development and as the Times highlights this morning, Mondi has never been a big acquisition player. Most of us who follow the sector appreciate that it is a very large scale business undergoing very large scale consolidations these days. Having failed to reel in Smurfit Kappa a few years ago, IP won't want to lose an opportunity like this: there are just not enough big targets around any more. There is still a long way to go but personally I am more than happy to hold IP paper. My portfolio has been trending towards the US for a few years now and so getting an existing under-performing set of assets under US control is good news as far as I'm concerned. Mondi is the one sector player that I've never owned and I think that they may have made themselves a medium term target as a result of yesterday's decision.

[pj fozzie] 19/4/2024 22:30

When the deal closes, will we get IP shares listed in US or shares listed in London?

Anyone know?

Cheers,
PJ

[cruelladeville] 19/4/2024 20:41

Exactly, I took the decision to cut and run at 396p too. Very glad I did.

[alotto] 19/4/2024 20:08

Laurence, there is a plan for a London listing, so there should not be a 30% WHT.

[phillis] 19/4/2024 16:02

Have bought back

[laurence llewelyn binliner] 19/4/2024 15:03

#1Knocker, I cleared at 396 pence and watched it climb to 415 thinking I could have waited a week or so, the timing to exit decision is so difficult, perfectly demonstrated today by what curve balls can come along so quite happy with the 121 pence total return profits and will consider re-entering, I like the business and the dividends, but did not want the IP paper, USD dividends and the -30% WHT on them..

[moorsie2] 19/4/2024 14:53

This is now easy money.

IP will soon be above the offer price so the value will be 415+ here

The US economy is booming and IP is due a rerating

[1knocker] 19/4/2024 14:28

Unfortunately LLB I didn't QUITE nail it. Playing it a bit too clever, I only sold a third at 405.4, and ended up selling the rest yesterday at 398.04. Damn glad I didn't decide to 'sleep on' the sale of the remaining two thirds over night though!

Selling is a hell of a lot more difficult than buying. 'Always be prepared to leave something on the table for the next man' is a wise saying. Likewise 'Don't let the best to become the enemy of the good'.

Numis notes that IP are rigorous in not overpaying for acquisitions, so if the deal were to collapse and the Smith share price fell back to circa 300, I would almost certainly get back in. Smith is a decent, well run, company, though an agreed takeover which fails at the last does a company no good, as it inevitably disconcerts some customers and suppliers, and of course takes management's eye off the ball during the period of the negotiations.

[moorsie2] 19/4/2024 13:49

The share price is now 100% anchored to the IP share price

[alotto] 19/4/2024 13:46

SMDS share price will adjust whatever direction IP will take at the opening of the NYSE

[alotto] 19/4/2024 13:30

It would be a yes to the IP from me, being part of a group with operations and market in the US mitigates currency exchange,row material cost volatility, gives a steady income stream and more secure dividend.
When are the shareholders going to vote?

[energiser01] 19/4/2024 13:07

Well that’s a no vote from me then …..

[kirkie001] 19/4/2024 13:00

No - it wasn't a cash 415p bid - it was in IP equity, notionally valued 2 months ago at an exchange that would have been worth 415p at that time. Currently, that exchange value is worth (about) 364p.

[alotto] 19/4/2024 12:57

If IP offered 415p and now the share price is 350 we have a guaranteed 15% profit in the near term or am I wrong?

[kirkie001] 19/4/2024 12:44

... which looks life a value for the takeover at c364p for a DS Smith share. So if it's trading at a shade over 350p currently, then you're talking about a c 12-13p execution risk discount in the price to unwind.. plus a 12p dividend - or about 6-7% FV difference between buying DS Smith and buying International Paper shares direct on the NYSE.

Not much... hedgies and arbs will spot it and make the trade for the turn... but for private investors, unless you've a huge amount of capital to buy them and sell forward to lock it in, probably not worth the trade.... unless you'd be a buyer of International paper equity today, irrespective of the acquisition.

My tuppence, anyway...

[kirkie001] 19/4/2024 12:38

Price for international paper last night seems to have been $35.26 at the close in NYSE last night. Interested to see what it opens at given Mondi's announcement...