Smith (ds) Share Discussion Threads

[moorsie2] 15/5/2024 15:11

Naturalement :)

[aimloser1] 15/5/2024 14:17

Unless the deal falls through bien sur

[moorsie2] 15/5/2024 09:50

Presently sitting at a 7.5% discount to nominal IP value.. Enough to be of interest to Hedge Funds and serious big traders..

This gap can only close in the coming weeks

[yump] 13/5/2024 21:00

Doesn’t the bid for IP at least show some evidence that IP is undervalued.

Also after the takeover of smds, in theory we would benefit from synergy savings or sell offs of less well performing assets, as well as the likely upturn in their markets.

[alotto] 10/5/2024 07:54

You won't get any more shares in IP regardless of what you pay, that's true.
However IP and SMDS share price should reflect a common valuation of the merged entity. If you want a stake in the merged company you should buy SMDS rather than IP. That's because SMDS is cheaper. The merger will eventually "equalise" the valuations. Where that valuation will sit is yet to be seen. Either SMDS is undervalued and IP fairly priced or vice versa. It may well be both companies could be overvalued, or both undervalued! But at the moment there is a upward force on SMDS and a downward force on IP, simply based on valuation, assuming the merger will go ahead. Of course that ignores the potential of a no deal in the event IP receives and accepts a cash offer. That is why IP has a higher valuation.

[jeffian] 09/5/2024 23:36

It doesn't matter what you pay for SMDS, you won't get any more or less shares in IP, so why bid it up? There must be a raft of sellers who want cash rather than IP paper and there's not much of a case for buyers joining the party at this stage. I guess most of us are already holders of SMDS rather than new buyers attracted by the supposed mark-up.

[alotto] 09/5/2024 19:51

Jeff the market won't pay 400p for SMDS but it pays almost $40 for IP with the prospect of a merger. So why not to pay 400p for SMDS? In my view the only reason is the concern the merger may not materialize

[jeffian] 09/5/2024 17:16

Because, as said before, it's a notional figure that varies minute by minute with market fluctuations. The percentage split between the two companies is fixed; it doesn't matter what the nominal share price is. Whatever happens, you're not going to get any cash (unless you sell in the market). In view of that, would you pay 406p to buy in the market today? No, nor would I, hence the current price.

[chopp1] 09/5/2024 17:07

Yes, by my calculations given the IP share price and current ER the DS Smith share price should be £4.06. So very odd to be holding around £3.60, at more than 10% discount. Don’t follow it.

[alotto] 09/5/2024 09:46

International Paper is over $39 per share which means £3.90 per share for SMSD. Are investors concerned the deal may not go ahead, hence the discount? When will the SMDS shareholders vote on the proposed acquisition?

[betman] 08/5/2024 17:48

I find it hard to believe that the Brazilians will win at the current offer. For me the most likely scenario is that IP can continue with their current offer. IP current share price inflated by bid but it has created a gap with SMDS price

[1knocker] 08/5/2024 10:28

I hope a few people had a look at Smiths News, as I suggested a couple of weeks ago. It has moved up very nicely since then, and the div yield is still over 7% after the share price rise.

[moorsie2] 08/5/2024 07:56

Please note IPs word " will come out of a cyclical bottom"

So they view this as opportunistic and will fight against it.

SMDS deal is nailed on and I think smds holders will benefit to hold IP shares till at least this time next year

[moorsie2] 08/5/2024 07:54

MEMPHIS, Tenn., May 7, 2024 /PRNewswire/ -- Consistent with its standing practice, International Paper ("IP") (NYSE: IP) offers no comment on rumors or speculation contained in recent media reports. The IP team, led by new CEO Andy Silvernail, is executing on business strategies and pursuing commercial and cost improvement initiatives across the portfolio to achieve best-in-class profit margins and significant earnings growth. In addition, as industry conditions continue to improve, IP will come out of a cyclical bottom for earnings. The company is also focused on completing its previously announced combination with DS Smith, which offers a unique and highly compelling opportunity to create significant shareholder value above its base plan.

[ygor705] 08/5/2024 06:37

alotto. Interesting. I think that one also has to bear in mind that IP is based in Memphis - the town where Martin Luther King was shot. Things have undoubtedly changed since then but it's not an area that has historically had the best of reputations for tolerance. Add this to America First in an election year and I am struggling to see why the Brazilians are doing this. Money talks but it's going to have to shout a lot louder to pull this one off.

[alotto] 07/5/2024 22:15

Ygor I agree, if anything the rumour has boosted IP's share price, which will soon be traced by SMDS and we will be short of 400p, possibly even tomorrow. For long term holding I'm still targeting (the equivalent of) 500p.

[ygor705] 07/5/2024 21:48

alotto.....from what has been said so far it looks like the Brazilians have come up with a nickel and dime bid whilst the IP share price is temporarily depressed. Yes, a more realistic offer might cause problems for the Smith situation but, thus far, it looks more like a spoiling operation to me. For why? I don't know yet but it will be interesting to see what the US press make of it all.

[alotto] 07/5/2024 17:47

Ygor well it's a cash offer, the shareholders get the money and move on. They lose interest in the company and its fate. But I don't think the offer will be good enough to make the big boys sell.

[ygor705] 07/5/2024 16:12

Personally, I can't see why IP would want to subordinate control of its operations to a company that operates out of a BRICS member country. The potential for political fallout looks significant and, in any case, IP looks to be a company with a strong US identity. Why would they want to throw that away when they have just struck what could be a pretty transitional deal for them in a politically favourable jurisdiction?

[alotto] 07/5/2024 15:10

Now SMDS and IP share prices are not strongly coupled ad they have been until the bombshell was dropped. Suzano has no business in the packaging space. IP should pursue the acquisition and discard the offer.

[alotto] 07/5/2024 15:08

$42-per-share offer lol... essentially offering no premium to current share price. If they make an offer it will either be higher or rejected in about 2 seconds.

[moorsie2] 07/5/2024 14:57

Fun and games

[alotto] 07/5/2024 09:50

I agree. We will see SMDS at the equivalent of 500p in less than one year I believe.

[moorsie2] 07/5/2024 09:23

Nice pick up today on that back of 2% gains in IP yesterday.

It is crazy that the 2nd biggest in US by market share (West rock) and 3rd biggest ( PCA) both have market caps larger than IP.

This is a sleeping giant in valuation terms and the new CEO who started last week can significantly improve that in the coming periods