Smurfit Kappa Share Discussion Threads

[moorsie2] 16/4/2018 09:11

The Industry is expected to show a very good Q1. See the note here on Stora Enso

If this is also the case at SKG then the rebuffal below 40 euros makes sense....

HELSINKI, 13 April 2018 (Press Release) - Stora Enso’s operational EBIT for the first quarter of 2018 was approximately EUR 369 million. This is well above the earlier guidance for the Q1 2018 operational EBIT. Sales for the first quarter of 2018, amounting to approximately EUR 2 579 million, were similar to the fourth quarter 2017 sales of EUR 2 511 million. The result was better than expected, mainly due to:
The good pricing environment in Paper and Containerboard (Packaging Solutions)
Higher volumes at Consumer Board division’s European mills
Continued strong operational performance

On 9 February 2018, Stora Enso guided that its first quarter 2018 sales were estimated to be similar to or slightly higher than the amount of EUR 2 511 million recorded in the fourth quarter of 2017. Moreover, based on the same guidance, operational EBIT was expected to be somewhat higher than the EUR 280 million recorded in the fourth quarter of 2017.

The second quarter 2018 sales are estimated to be similar to or slightly higher than the amount of approximately EUR 2 579 million recorded in the first quarter of 2018 and operational EBIT is expected to be in line with or somewhat lower than the approximately EUR 369 million recorded in the first quarter of 2018. The impact of annual maintenance shutdowns is expected to be approximately EUR 40 million higher than in the first quarter of 2018, and it is included in the above guidance.

Stora Enso will announce its first quarter 2018 results on Friday 27 April 2018.

Part of the bioeconomy, Stora Enso is a leading global provider of renewable solutions in packaging, biomaterials, wooden constructions and paper. We believe that everything that is made from fossil-based materials today can be made from a tree tomorrow. Stora Enso has some 26 000 employees in over 30 countries. Our sales in 2017 were EUR 10 billion. Stora Enso shares are listed on Nasdaq Helsinki (STEAV, STERV) and Nasdaq Stockholm (STE A, STE R). In addition, the shares are traded in the USA as ADRs (SEOAY).

[ygor705] 16/4/2018 08:22

Article in Sunday Times yesterday suggesting there is institutional pressure for SKG to open its books to IP and that a hostile bid is still possible.

[ygor705] 13/4/2018 15:58

SP suddenly turned better after Wall Street opened. What do they know that London doesn't?

[moorsie2] 13/4/2018 15:23

At the present IP share price of 53 dollars and a conversion rate of 1.233 then the last offer made is valued at 38.26

40 seems to be the magical threshold but only after dividends are given to shareholders. So the deal needs to get to 40.65. That requires an IP share price of 63 dollars

[soundbuy] 13/4/2018 10:55

Tick tock..........

[ygor705] 29/3/2018 13:15

Just bought back the 50% of my holding of SKI that I sold at £32.07. Nice little profit and 4 days of non-trading ahead when Int Paper can think about its next move.

[ygor705] 29/3/2018 09:28

Not expecting much strength here today in front of the Easter holiday. Not sure why Int Paper came back with a revised offer that looked stupid in the light of the fall in its own share price IMO it will need to think about a London listing for its own shares if it wants to persevere in offering its own paper. If it does go hostile it needs to sharpen up its act and get some better advisers.

[soundbuy] 26/3/2018 08:45

IP - with an offer part cash/shares, a declining share price doesn't do you any favours....be interesting to see what IP's share price does today on revised offer....

[soundbuy] 26/3/2018 08:42

Interesting times...........

[soundbuy] 23/3/2018 13:11

quotes Tony Smurfit as saying the bid

“is by far, far away from being a hefty premium” and “There isn’t anyone that I have talked to that would think that this would be a good price to sell at.”

[soundbuy] 23/3/2018 12:17

I'd go along with that.......

A tad of news............

[moorsie2] 23/3/2018 11:05

Therefore any takeover of a successful business needs to contain a good 20-25% premium from here - hence 36-37.5 stg offer

[soundbuy] 21/3/2018 09:43

Around £30 looks fair value here peer/sector-wise........

[soundbuy] 14/3/2018 10:50

Or Mondi and SMDS valuations stretched??

Anybody looked towards Asia/Japan or Canada for likely interested parties?

[soundbuy] 14/3/2018 10:43

With recent gains SKG is now fairly valued sector-wise - its taken the bid to realise this - now stick on a takeover premium of 25% minimum and you're close to £40

Will IP walk? Personally doubt it, the perfect deal and it won't get any cheaper down the line so simply now or never.

[ygor705] 13/3/2018 17:48

Moorsie2.....we'll see but I've been here before. If the market genuinely believed what you are saying the share price would be tracking higher in the absence of further news but it doesn't seem to be doing so. Have big gains to protect here and never expect to extract the last penny ........ or pound for that matter.

[moorsie2] 13/3/2018 13:03

this will not drop back to 25

In euros it is at 36 now - that is 8.2 times EV / EBITDA for 2018 expected EBITDA. Similar and slighty less that Mondi and DSS.


Moreover EBITDA 2018 should be ahead of market expectations making the multiple close to 7.5!

West Rock took out Kapstone at an EV/ EBITDA this year at 11 times

The potential offer of 36.5 euros was at a multiple of 8.5. To acquire a successful business they should be paying closer to 9.5 times and as ebitda should be higher than expectations in 18 - it brings the share value to upto 44 euros each! This would be a sterling price of more like 38 on takeout and 34 on normal valuation

You have just given away your upside opportunity while over estimating the downside... :(

[ygor705] 12/3/2018 11:16

Sold half of my holding on Friday at £32.07. Will end up higher than that if an offer materialises but will trend back towards £25 if nothing happens.

[moorsie2] 07/3/2018 15:33

Market is starting to price in that the offer will have to go higher to reach closure.

40 seems like the golden number

[soundbuy] 07/3/2018 12:09

Didn't realise how much of the sector is PE owned.

Rather large for PE but you never know.

Geographically, a tailor made fit IP+SKG

Jefferies

Whilst Smurfit Kappa rejected this proposal as “fundamentally opportunistic” and significantly undervaluing its business, Jefferies views it as an opening exchange of a possible protracted bid process. Key from here is: potential benefits & synergies of possible combined IP+SKG entity and how best to structure offer for SKG. Suggest Smurfit Kappa holders await developments.

[We] value SKG at €33 based on CY18 8.8x EV/EBITDA, in line with peers SMDS/MNDI. We agree with IP’s assessment that possible SKG+IP transaction would “create an opportunity to realise meaningful synergies through enhanced efficiencies”. With modest European & Americas IP & SKG business overlap, assuming 2% 2018F SKG revenue synergies, gives possible additional €6/share synergy benefit, or potential €39/share SKG value (assuming full accrual to SKG).

[moorsie2] 07/3/2018 10:08

from my limited knowledge not too many companies big enough to enter at this point... any ideas?

[moorsie2] 07/3/2018 09:18

Very strong rebuffal from the SKG board.

Would indicate a fight and therefore potential to go higher.

If independent financial advisors advised the SKG board that the offer undervalues then I would expect a 10% uplift at some point to sweeten such a deal. 40 euros per share will be difficult to independently assess as undervalue..

[soundbuy] 07/3/2018 09:04

So about €36.50.........

would this suggest as an opening salvo they'd go to €38/39? Or walk?

Interesting times............

[soundbuy] 06/3/2018 15:52

Jefferies sees a "realistic possibility" that IP comes back to Smurfit for talks.