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“… boxing clever…”
Recycling that old joke huh? Delivered, may I say, with panache. I guess I’ll wrap it up before we get carried away.
Cardboard boxes suddenly got interesting .. DS Smith boxing clever with two on the hook, think IP have got this landed as Mondi hampered by debt.
Sold at 3.97 and now watching for updates.
May buy Mondi next week.
I will be looking to sell next week, but not entirely sure about it yet
I sold at 3.98. Avg @3.00 so with the recent dividend as well too good a profit to turn down. WiIl be watching from the sides for major changes as this is a good share but too much uncertainty for me in the current bid process. GLA
Sold out at £3.99 . Have to say a very easy 50 percent plus made. Wish it was always like that.
Me too. Sold at 397, which gave a 32% return since May.
Reading the various bits in the FT, I’d prefer a Mondi merger and - if it happens - then I’ll be back in. IP looks like too thin an investment proposition to me.
GLA.
I have sold this morning at 395.5 for all the reasons below but i see sp up a penny since, wonder if it will go up more
I sold today too. If the offers full through it will head back to 300p so on a risk reward methodology, I took the money and ran!
Hi all I have sold all my DS Smith (30,000 shares) over the last two days.
I don’t believe Mondi can raise the extra funds required to beat IP, and I recon IP could walk or be rejected by DS.
Good luck to you all. Hope it goes higher for you all (probably will now I’m out).
Sold today. Reason being if SMDS accepts the International Paper offer the dividends will be subject to the 15% withholding tax, which is inconveniente for ISA investors. I banked a 30% profit however I will buy again in case of a merger with Mondi
The outgoing DS Smith CEO will simply want the highest price for the shareholders before he retires, any future integration problems won't be his concern. Money talks.
Very interesting Lex article in the FT - https://www.ft.com/content/cd354951-cb4f-43a6-9120-86dea3ba4424 (paywall).
In summary:
- Both bids are effectively defensive following Smurfit Kappa’s deal with Westrock
- Mondi almost certainly couldn’t afford to up their offer, but International Paper’s offer is effectively only 4% above Mondi’s offer at closing share prices
- The Mondi/DS synergies are obvious and worth at least
- The International Paper/DS synergies are much weaker
The nub is that shareholders should beware of International Paper paying a premium when it is likely to be value destructive to the shares you’d be getting (my words, not theirs). The Mondi offer is much more obviously value creating.
If anyone else has FT access then please feel free to correct my summary.
A previous (non-paywall) article on Mondi/DS synergies - https://www.ft.com/content/55ffcf39-c4ae-404e-84cb-b312b456e48a
The £15m trade was the end of day auction rather than a single trade, so I wouldn't read too much into that.
There were some chunky trades declared after the close though, just not quite THAT chunky !
£15m buy at 16:35:04
At least 17 other trades at or around £1m+
I don't think it is all about the cash equivalent, and whoever offers the more will take Smith DS. I believe Smith will have to ponder the long term advantages of working "synergistically" with one or the other company, Smith may still prefer to go with the lower offer from Mondi.
Re. International Paper: if the acquisition materializes it will be a blow to the LSE, in addition to Unilever which seems very likely to list the Ice Cream business in the Netherlands. I wonder what is going to be left on the LSE in a few years from now with the current ridiculous valuations.
I see it that if MNDI walk away their price will rise….I’m tempted to sell all my SMDS now and put into MNDI in the hope that will happen …I don’t want the shares in IP
Now that IP have joined the fray, SMDS is rising, as we might expect, but also so is MNDI. Can anyone explain the logic in that?
I'm trying to work out whether to hold or sell my remaining shares, having already sold 40% this morning. I'm tending towards sell on the following grounds: 1. I'm not sure Mondi can outbid IP's bid; 2. At 3.93 it's close to IP's bid already and I don't want shares in a US company; 3. It's not obvious who else might enter a bidding war; 4. If everyone walked away, as they did with Curry's, the shares could drop back to say 3 quid, so downside risk seems higher than upside. Any decent counter arguments?
Could be hassle havining a share quoted on nyse
Susssex does make the point however that IP trades on NYSE in a currency and a time frame which are different from ours.
The extra value is welcome but if this were to go to IP I think I would be tempted, as a consequence, to sell out and use the funds elsewhere.
“…their performance took a hit on the offer.”
Agreed. But/and in principle the impact on International’s share price is pricing out a proportion of the premium being offered. Acquirer shares invariably drop on announcement.
IMV rather than focusing on the “money” that isn’t changing hands, you need to view that you’re swapping an undervalued asset for another undervalued asset. The more interesting question is which of Mondi or International are more undervalued.
400p and I’m selling
We all have to be mindful that the offer is on a share offer basis. The offer was made on 1 DSS share equating to 0.1285 International Paper share, not £4.00 to £4.20. At the close of play (US) on 26/3/24 our offer has fallen to (38.20/40.85) x £4.15 = £3.88. It is important that we all keep an eye on the NYSE over the coming days and weeks on IP, as their performance took a hit on the offer.
https://www.reuters.com/markets/deals/uks-ds-smith-deal-talks-with-international-paper-2024-03-26/
You also need to account for currency fluctuations, which as of CoP on Monday 25/3/24 was £1 = USD1.264.
That’s more like it. 387p will force some more weak sellers out but at least the offer is not as derisory as MNDI’s bid. Getting interesting now.