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My only concern is:
In accordance with Rule 2.5(a) of the U.K. Takeover Code, International Paper reserves the right to make an offer for DS Smith on less favourable terms than those set out in this announcement: (i) with the agreement or recommendation of the DS Smith Board; or (ii) if a third party announces (after the date of this announcement) a firm intention to make an offer or a possible offer for DS Smith which, at that date, is of a value less than the value implied by the Exchange Ratio. International Paper reserves the right to introduce other forms of consideration and/or vary the mix or composition of consideration of any offer.
I agree I can’t see Mondi being in a position to offer more. 415 is the number I have been talking about from the start. I’m going to sell half my stake and bank the profits, whilst letting the rest ride. There are still good synergies so it should strengthen both companies.
I can’t see this being much of a fight.
Mondi’s proposal gave Mondi owners 54% and DS Smith owners 46%. I can’t be bothered to do the maths right now, but matching or beating International Paper would effectively result in a reverse takeover - and likely decimate Mondi’s share price.
Mondi doesn’t appear to have enough market capitalisation to counter without moving to a share and cash basis - and taking on debt to do so.
International Paper’s offer gives a 75:25(ish) split and offers room for improvement given their higher market capitalisation.
Thoughts?
Mondi only have till 7th April to confirm their offer or walk away, and this afternoons announcement of the higher IP bid has put the proverbial cat among the pigeons.
It will be nice to sit on the sidelines and watch how the Mondi and IP face-off develops.
The ball is now firmly back in Mondi court.
This is exactly that I hoped for! Mondi tried to get DS on the cheap
This could be fun!
Based on International Paper's share price of $40.85 at close of business on 25 March 2024, the terms of the Proposal represent a value of 415 pence and premium of 48 per cent. to DS Smith's closing share price of 281 pence on 7 February 2024
A possible bidding war, then? Yes, please!
Sky reporting international paper is looking to put in a counter offer!
On the table now. Gla
In terms of the 1381/373 split, MNDI has now risen above that. Pity SMDS didn't keep pace; we would now be above 373 had it done so.
"Derisory? What do you expect them to offer?"
441p the average SP in 2021 would be a good for starters.
AbjectPerformer it is wrong to think about the merger in terms of equivalent cash offer. The "cash value" of your shares is determined by the % share of the merged company and its market value at any date consequent the merger. Mondi cannot guarantee you will get 375p or 400p once the merge is completed as Mondi has no control on the share price.
What you may argue is that you may want more than 46%, but that will require a thorough analysis that I believe is beyond your capability (it is insufficient to look at the financial statement, you will need to have the insight of a full board of managers assessing the benefit of merging operations).
I think at this point in time we could be quite happy if we trust the management and if we are happy to hold for some time and see how things go. If you are hoping to cash in 400p and run away and chase some other opportunity you are in for a gambling game, which it could turn out well for you, but it is not guaranteed.
A take over price of somewhere north of the 12 month high should be offered. Which in this case has happened.
However Ageas had been scared off from direct line last week as the 12 month high was opportunistic due to the geopolitical issues affecting ftse stocks over the last 4 years; Covid , war/inflation.
Therefore with shares inevitably on an upward trajectory and putting war behind them in the coming years an offer somewhere nearer to the high in 2021 of 450 would have been reasonable, which was 2.5 years ago.
Therefore I’d have thought an offer of 400p would have been reasonable and take most shareholders out of a loss inducing situation or a move to mondi.
Derisory? What do you expect them to offer?
There will be significant and compelling benefits should the merger be accepted. It is possible Mondi will increase their derisory initial offer. Weak sellers are being snapped up - best to stay put and see what transpires. In my opinion there is plenty more upside here whatever happens.
Mondi took a kicking for pulling out of Russia and that has had a knock on the share price.
I didn’t think Smiths last update was anything to shout about, it seemed to be increasing debt
and could be argued it wasn’t the better company.
The merger statement quote significant cost savings due to combining the businesses. So, to be fair I take note of what they say, rather than views on here.
If the economy improves and interest rates start to come down, it will be a good
recovery play, and probably a good bet , because once Nvidia bursts it’s bubble and it
will do, surely a rotation will occur.
Something to think about
I have sold, so won't be bothering this board much in the near term, BUT I was a confident holder in SMDS , a well -managed company in a growth area. I chose them over Mondi(or others) for what I still believe are good reasons. Mondi's SP peaked at 2100+ in 2018 and their latest results published on 22 Feb (I suggest all holders here have a read! EBITDA down 600m euros, revenues down1.2bill euros ) have been followed by a 7% drop in the SP. The markets are making their reservations clear.
No more from me on this topic , I am happy with my decision and respect others whose views may differ, and so long as you are well- informed I wish you well.
Longer term it will prove a decent share to hold
.
The decision to sell on a post merger mondi sp dip is a short term one,
I personally want long term growth and this take over will likely see long term growth for the new combined business.
According to the RNS statements regarding the merger, there are to be significant cost savings due to the merger. Why would you then sell, surely with the chatter of rate reductions by the FED , one would assume that the share price post merger would add some value.
It seems to me a no brainer and a share to hold and review the end of the year.
I’d say you pretty much covered it.
However I don’t think the Mondi share price will fall if they are successful with their current bid. If you agree they’re getting a bargain it should help their share price long term. It does seem that Smds has agreed this bid so I can’t see why it would fall through but it is always a risk. I’m staying because I see a,b and c being the most likely outcomes. Looking at how the smiths sp has reacted I think a is the most likely but they all represent an increase in the current sp.
My last entry here was in about Oct 22 at the 230 level, since then I have added and now hold quite a few at an average in the 250's . I have read through the recent posts but it seems that no-one has summarised the position thoroughly, so here goes:
There are 4 possible scenarios;
A The takeover occurs on the present terms
B The takeover occurs on slightly different terms(a higher offer/some cash)
C A competing bid arrives
D The deal collapses
So as a holder what to do(my thoughts everyone else makes their own decision).
For A/B IF you wait and hold until the deal completes you end up holding shares in Mondi equivalent to the number of shares you hold X 370p.However IMV, on completion Mondi shares may well fall because of analysts' fears of
" integration risk/delay, Mondi overpaid, dilution ......."The fact that the offer is "all share" is generally not viewed kindly by the city.
For C, you wait until the dust clears and ( maybe ) a higher offer succeeds from Mondi or an alternative bidder, or Mondo or the other bidder includes a significant cash element, better outcome/
For D SMDS shares will undoubtedly fall sharply , even though they have done nothing wrong and are , in effect , the same company as today. On 8 Feb when the news broke SMDS were trading in the 280's , that's about where they would revert to IMO .
So what to do?
As I said above, I hold at an average which will bring me (incl divis) about a 40 % profit in 18 months. outcome A/B might add another 10% to that, D would take me back to 10/15%, and C if it occurs may be a significant improvement.ALL things considered, will sell tomorrow and reinvest the money elsewhere.
Feel free to argue/amend or rubbish my view, it is my personal opinion , no more, and if flawed, help me to correct my analysis, whatever the outcome I wish you good luck, IMV SMDS would be better as a stand-alone, but the company seems pretty set on accepting the opportunist offer.
Jefferies "said the strategic rationale for the merger with rival DS Smith is "compelling", with "substantial" synergies and value creation."
Maybe that will help get things moving in the right direction.
Based on the stated proportions of the MNDI share only offer, this share price is now completely dependent on the MNDI share price. Currently sitting at 1307p for a MNDI share, that implies a value of 353p for an SMDS share. Not a great offer at all. Will any larger shareholders potentially turn the offer down at this kind of price? I would!
Short price to around 290 then offer premium of 33% looks good BUT would be fairer at 315 plus 33%, I have traded SMDS
at 383 December 2020 and again April 2021 at 418 and bought back as low as 260. Wish I knew what settlements directors
are offered. Feel I'm being shafted
Sitting on my shares in SMDS after the Wincanton takeover looked a done deal and then another offer came in worth waiting to see what happens as still in profit either way