Smith (ds) Share Discussion Threads

[buyzantium] 24/6/2024 08:41

I am puzzled that the article last week in the Guardian quoting Miles Robert CEO as stating that the takeover was proceeding at absolutely full steam and definitely expecting the deal with International Paper to be completed has had such little impact.

[dssmith51] 22/6/2024 13:10

My feeling were there was some doubt in the market. The % an indicated continued to to entend with Suzano shares 2% higher before dropping down a little.

[jeffian] 21/6/2024 22:53

Indeed. It was just a comment, but you seemed to require explanation!

[alotto] 21/6/2024 19:08

I see. it's a bit speculation tho. Especially with a tiny movement in the share price.

[jeffian] 21/6/2024 18:50

Could be. If the acquirer (Suz) is up and the target (IP) is down, it would suggest that the market is more doubtful of that deal going ahead, leaving IP free to proceed with its bid for SMDS.

[alotto] 21/6/2024 15:37

Is it supposed to be a news?

[dssmith51] 21/6/2024 15:11

Interesting? Suzano shares are up 1.5% while IP are down 0.5%

[betman] 21/6/2024 15:05

anI cannot find nay info on their takeover bid on the Suzano website. Is there a source of information on what's happening ?

[buyzantium] 20/6/2024 15:54

Just search 'DS Smith news' it should be there.

[alotto] 20/6/2024 15:51

Can you share the article?
We will trade around 450 soon

[buyzantium] 20/6/2024 15:36

Guardian article today - The boss of the FTSE 100 company DS Smith has said its £5.8bn takeover by a US rival is going at "absolutely full steam", despite concerns it could be derailed by another packaging sector merger.Miles Roberts, DS Smith's chief executive, said merger work with International Paper was "going very well" and that he definitely expected the deal to complete.

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[santar] 20/6/2024 00:16

Don't forget Mondi with their 373p offer. Shouldn't this underpin the SP?

[pj fozzie] 19/6/2024 18:16

The calculation for takeover price is dependant on two changing values: The IP share price and the £/$ exchange rate.

Right now IP = $46.25
And £1 = $1.27

Therefore the current IP share price in £ is 46.25 divided by 1.27 = £36.42

Since the takeover offer of DS Smith is 0.1285 IP shares for each DS Smith share,

Then the current takeover value of DS Smith is 36.42 x 0.1285 = £4.68

This is a 33% uplift on today's closing price.

If we knew the DS Smith takeover was gonna happen, then buying at this price would be a no brainer.

However there are two big risks:

1) The Suzano takeover of IP proceeds.

2) The Suzano takeover fails and the IP share price drops, because it's current price is simply being supported by takeover speculation.

Personally, I think number 2 is more likely - but I don't see a 25% drop in the IP share price, therefore I believe DS Smith is good value at the current price. If number 1 occurs, then I'm also happy, I was already a DS Smith holder before all this takeover stuff happened and the fundamentals haven't changed. I'm happy to hold and maybe add in the future. My investment philosophy tends to be buy and hold forever - living off the dividends.

Cheers,
PJ

[alotto] 19/6/2024 11:48

Yes @ about 445p.

[mjcferguson] 19/6/2024 11:37

Am I correct in thinking that the increase in IP share price to $46 means that the effective takeover price is well ahead of the current dsSmith share price.

[alotto] 19/6/2024 08:55

I think Suzano has made that quite clear. They don't want SMDS

[buyzantium] 19/6/2024 08:32

How sure are we that DS Smith will be excluded should a successful bid be made by Suzano.

[alotto] 11/6/2024 08:03

2 weeks is a lot in the midst of a takeover. But hopefully you're right

[bell011] 10/6/2024 21:13

Top bigwigs from IP came over to the flagship Exning factory a couple of weeks ago, with Miles Roberts to meet and greet..... allegedly extremely impressed with operations and fully committed to Smiths deal and reiterating that the brazilian interest is a NO

[alotto] 10/6/2024 21:05

Kinwah I didn't know about this but it sounds entirely possible.
This is taking longer than I was expecting. I envisioned a no deal situation full stop

[kinwah] 10/6/2024 16:04

I find it very interesting that Suzano is talking to 3 Japanese finance houses regarding its financing. That suggests to me that part of Suzano's plan would be to offload some of IP's assets on to Oji Paper perhaps to avoid anti-trust issues. Why else would Japanese banks be looking to help a Brazilian company take on crazy levels of borrowing?

[moorsie2] 10/6/2024 08:00

Brazilian pulp and paper giant Suzano (BCBA:SUZm) is reportedly looking to secure up to $19 billion in debt to potentially acquire International Paper (NYSE:IP), according to Bloomberg.

Analysts from Jefferies are predicting a potential cash offer for IP in the range of $54-57 per share, a figure that aligns with previous investor expectations. However, IP's board may value the company significantly higher.

Suzano's strategic move is geared towards creating a global industry leader with robust cash generation capabilities to expedite debt reduction. The company is also nearing the completion of a $4.2 billion project to boost its hardwood pulp capacity, which is expected to further enhance its free cash flow.

The reported $19 billion debt that Suzano aims to raise implies a potential acquisition price for IP in the $54-57 range. This would increase Suzano's projected leverage to 5.9 times its 2024 estimated earnings or 5.3 times its 2025 estimates, based on consensus predictions for Suzano and IP model forecasts.

Given IP shareholders' push for the company to divest its Cellulose business, it seems unlikely they would accept stock in a Brazilian pulp company. This is particularly true given Suzano's falling share price since expressing interest in IP.

Therefore, the news of Suzano's potential $19 billion debt aligns with the expectation that any offer below mid-$50s in cash would likely be rejected.

If the $50 per ton increase in linerboard holds, it could boost IP's EBITDA by approximately $550 million or around 26%. Using this framework, IP's shares could reach close to $56, even before considering any uplift from Silvernail's commercial and operational initiatives.



In an optimal scenario, shares of IP could approach $90 if IP manages to close the gap on revenue per ton and the $50 per ton increase sticks.

However, with mixed investor sentiments regarding the SMDS deal and a potential mid-$50s cash offer, deciding on an equity component becomes more challenging. Especially given that Suzano's stock has dropped by over 20% since initial reports of its interest in IP surfaced, while IP's stock has rallied.

Analysts at Jefferies have retained their Buy rating on International Paper (NYSE:IP) with a price target of 57

[tnt99] 06/6/2024 09:50

Well this won't go through as the shares are currently 44 dollars

[ygor705] 05/6/2024 21:18

Over the past few days most of the trading here seems to have been happening after hours and in very large soze. Given the volumes involved it looks to me as if some significant positions have been created. Given the relatively modest share price changes I'm wondering if these 'bets' are being hedged somewhere.