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Alessandro, opinions make markets, I'll check back in a years time and we'll see how it turns out. As an aside, I do hope those who take and hold IP make a profit, that success will cost me nothing (except a bit of regret!) IMO my money will be better deployed elsewhere...
GLA
I bought £1000 of this at 375 before Ukraine war unfortunately , 2021 I believe and reinvested each dividend which was under or around 300p
While I didn’t get in very cheap , I did sell at 400p. So my small investment worked out ok in the end
Casapinos, yours is a bold statement regarding the PE of IP. Do you really believe that the share price should be half as much just because the GAAP earnings came in the figure of 300 millions, taking the dividend to over 10%? Do you expect investors to sell out of fear that 300 mln of earnings are the new norm for IP? Why would an investor sell the shares in a company making adjusted EBIT of $1.2 bln and with a market demand for packaging expected to improve throughout 2024, for the average Joe to come around and take the steal? Just to mention, the combined entity is expected to make $400 million savings. That is about the figure of SMDS FY net earnings. The share price for IP is going to be on the upside if and when the merger materializes. There are very slim chances to see IP's share price declining much further, and if that is going to happen I will be happy to load up more shares. I believe SMDS holders will see the valuation of their shares to be in the region of 400p and over in no time. This is just a market over reaction and a plain opportunity to buy the shares of a quality company at a 15% discount.
The agreed deal is for SDMS shareholders to get 0.1285 of an IP share for each SMDS share held. At present rates of exchange and with the IP SP closing at $35.38 that equates to a value for each SMDS share of £3.67. Expect the SMDS SP to hover at or very slightly below that value until the deal closes, unless, as I half expect the IP SP falls a little . I sold at 341p a while ago and have missed the opportunity to sell at recent highs , well done to those of you who did sell more recently, not a great additional return for those still holding.
As an aside it's worth noting that IP has P/E in the 40's having made only $300m last year on a net income of almost $19bn. Would I hold? I leave you to guess the answer.....
Good. I love arriving at Paderborn station and passing DS Schmitt and seeing the Union Flag fluttering! I am sure Mondi would have replaced it.
Not a massive surprise to see them pull out.
Because of the drop in IP's share price their existing offer was, on paper, broadly similar to IP's so they probably felt DS Smith's board preferred the tie up with IP and it would take quite an increase in their offer to get DS Smith's board blessing.
Shame, but there you go.
I'd say I nailed this decision. Congrats to all those who sold out. Bad luck for any holders.
Wow... Now a 12% drop. Over reaction?
An RNS has come out saying that Mondi has decided to pull out of the purchase.
IP share price now $35.33.
So $35.33 x 0.1285 and divide by exchange rate of 1.24 suggests to me that the bid is (at this moment in time) worth £3.66 per SMDS share.
Yes the market maybe thinks (or hopes) Mondi will come back.
Or maybe that the IP share price will increase (due to the "synergies" of the combined company?).
Or maybe not enough people have bothered to read / understand the terms of the offer and think it is for £4.15.
It's quite an interesting situation - I have made my risk/reward decision, good luck to you all in making yours.
Not nonsense at all - market is where it is today because there might still be a counter offer from Mondi. If Mondi drop out you will see the sp tracking the IP sp which at the moment means the sp & the offer would be around the £3.71 mark . Do you not understand the RNS ?
What nonsense. Market also indicated otherwise.
Yes grumpy
I had worked that out as well - also sold this morning when I realised. Personally I can’t see Mondi coming back in -
Chaps,
The headline "offer is for 415p per SMDS share" is bol***ks.
It is an all share offer, which will go up and down - presently, based on IP closing yesterday of (less than) $36, it values our shares at 371.8p each according to my calculations.
I have consequently sold £50k SMDS this morning.
Of course if Mondi come back I will have egg on my face.
Good luck to you all whatever you decide to do.
I think a good deal all round - the US valuations more realistic and a bigger US enterprise will provide long term wealth to shareholders.
Door is open for Mondi to increase their bid. Let's see.
Unfortunately the big boys will take the IP offer hoping that shares listed in the US will give them a better return. For the PI's the Mondi offer would probably be a better deal.
Given that it wasn't so long ago that SMDS was trading over £5, whoever wins is getting the company on the cheap.
Should have sold last week.
Aless - Shareholders have not yet accepted the offer - all the board has done is recommend that they do so, it is in the hands of the holders to reject if they wish to.
I am still hoping that they will do a second listing in London .
Sad how the first thing they will do is to lay off 400 people. Sad that another stock is taken off from the LSE.
Unfortunately the shareholders have been short sighted and selfish in a way.
Quite possibly, deep - The Smith board originally agreed the Mondi deal, now they've switched in favour of the IP approach - the Mondi merger seems the better tie - up for DSS, according to most observers, bringing into being a European major grouping being a cleaner arrangement for existing shareholders, too.
Mondi has pondered this amalgamation for quite some time and now they've made their move for it, will they let it slip through their fingers for a modest improvement in their terms?
We'll soon know - sasa.
IP it is then.
Mondi still have till 23rd April to up their bid . It might not be all over yet !
Personally at this price I’d rather be out and put the money in other undervalued ftse, than deal with this nice problem and potential us tax
It's a high quality problem to have. You will be getting a good bump in asset value compared to previous valuations. What you do with it from there is up to you. Despite withholding tax and lower dividends, my US shares have performed far far better than my UK. ones.