Smith (ds) Takeover Rumours (SMDS)

If you want shares in the combined group there's probably something to be said for holding IP rather than DS at the moment. The most likely outcome is that the takeover will go through, but if it doesn't then I'd guess the IP share price will rise while DS Smith will fall.

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 SP 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.

... 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...

Without any cash on the table, it's hard to see how a bidding war would work as the 'value' attributed to each bid is at the whim of the market. This is really just a merger rather than a takeover and the 'best' outcome is the one perceived to offer the greatest synergies and growth going forward. The packaging industry is one I want to keep invested in my portfolio so I will be keeping the shares for the long term.

IP statement just issued https://uk.advfn.com/stock-market/london/smith-ds-SMDS/share-news/International-Paper-Company-Statement-re-Possible-Offer/93605735 means that the PUSU deadline for both potential offers is now 23 April, though this can be extended by the Takeover Panel. I intend to sell in the market at some stage as I've said because I don't want either bidder's paper, but continue to hold for the time being in case of some positive developments as there's no rush. Doing nothing is often the optimum strategy.

There's been a flurry of merger / takeover stuff in the last few weeks, which presumably shows how undervalued the UK market is, certainly with income stocks. Its all nice for anyone that bought relatively recently, but not so good if you bought much higher and were hoping for a company-specific recovery, as the rates start dropping in the UK. Not sure how international/euro rates are doing, so receiving shares in non UK stock makes decisions a bit trickier.

Agreed, alotto. This is a merger, not a takeover, and for those who wish to sell, I doubt they'll know what they'll get in cash terms until completion, as I think you(?) said previously. Personally, I will be happy to hold shares in the merged entity and see where it goes.

#4424, We may not find out tomorrow. If there's been no agreement at this stage there's every chance they'll ask the Takeover Panel for an extension. It would not be unusual.

No mention of the takeover in the trading statement this morning.

It is a regulatory requirement to disclose all dealings in a company once it is declared to be in takeover/merger talks. htTps://www.thetakeoverpanel.org.uk/wp-content/uploads/2022/04/Summary-of-provision-of-Rule-8-July-2021189117.3.pdf?v=21May2018

Mondi Plc has increased its preliminary takeover offer for rival DS Smith Plc as it seeks to create one of the world’s largest packaging companies, people with knowledge of the matter said. Mondi improved its indicative all-stock proposal several days ago, the people said, asking not to be identified because the information is private. DS Smith still sees that bid as inadequate, the people said. Deliberations are ongoing, and there’s no certainty they will result in a transaction. Representatives for Mondi and DS Smith declined to comment.

After the takeover of RPC, I bought this as an alternative in the packaging market, not expecting it to set the world alight but attracted by the low PR ratio and the dividend. As it is, I'm only just back at breakeven now, so not getting overexcited by the figures being touted, particularly at the lower end. Having said that, if I was happy to buy and hold Smith, with an all-share deal I suppose I should be content to remain a shareholder in the enlarged outfit, effectively retaining my interest in Smith whilst gaining an interest in the Mondi business and any synergies flowing from the merger.

Any thoughts out there as to whether Mondi might still be considering a takeover as reported in 2021. Current attractive low price and beneficial synergy makes it feel that it could perhaps resurface.