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I won’t be selling for 2 reasons, it is a low ball offer, which means mondi is getting a bargain so it should benefit the mondi share price long term especially if they can get good cost savings which should be easy. Secondly in think the 373 has been put out there for others to beat if they want to. It looks like a deal is going ahead and it will be for 373 or above( obviously depending on what happens to Mondi sp but at this price I don’t think many would say they are overpaying.)
Yes I tried to figure it out as to dividend in new company etc and a bit above my knowledge with all this TBH so I'm setting a price to sell and look for a new investment. will be a 25% gain which I am happy with.
I'll be selling; pretty poor deal for LTH
Certainly some big late reported trades.
... and the fact that most of the bigwigs have secured cushy positions in the new management team, plus will get lots of lovely new shares in the larger business? No wonder it is recommended!
Are you taking into account, the amount of debt the company has?
Sorry, accidentally posted before finishing...
Option 2 is that you do nothing in which case your shares will automatically convert to the newco shares at the agreed exchange rate at which time you will become a Mondi shareholder
Your options are:
1/that you sell out before the deal is fully finalised, in which case you get the SP at the time you sell,
Sorry might be a silly question but I'm kinda new to takeovers etc. What will I get once this sale happens? do I get cash and new shares in the new company, shares for shares once the value of each is worked out ( so 1 share for every 4) Thanks
As a very long term holder of this worthy company I am astonished that accepting such a bargain-basement deal is being contemplated by the Board. Let us hope that a white knight is saddling up his steed not too far away.
From experience I see everytime there is a bid that the Target Co opens around 5,6 % below the bid price and the gap slowly closes as the deal date approaches. It carries no meaning in relation to the comments you always see ranging from
Done deal
It's not going through
They expect a bidding war
It's too cheap
Etc
Hi Grezzz,
It looks like sloppy reporting to me.
I'd have thought that it would be subject to "due diligence" on both sides, shareholders on both sides voting in favour, regulatory approvals (if required), etc etc, which is why an extension to the deadline was asked for and agreed. As well as this being an all-share deal, so the "acquirer" doesn't need to take on a load of extra debt, the other main difference from most other "takeovers" that I've seen is that in effect SMDS management are recommending it to their shareholders rather than saying "shareholders are advised to take no action because we're going to negotiate a better offer".
All the best, Mike.
Yes it feels fairly 'done' to me too. You'd have thought that respective large shareholders on both sides have been kept in the loop and whilst its never done till its done, you'd think that they must have given at least a nod before the announcement.
Also shorts in Mondi have dropped recently which might suggest that fears of a vast overpayment for SMDS have become less likely and the lack of large shorts on SMDS might suggest no large drops.
Both SP's seem about right given some 'sell on news' dissapointment on SMDS but in medium term i think theres a buy and hold profit to be had here.
IMHO
Well, the deal has been agreed in principle, key roles have been established and Smith ceo is
retiring. Why would it not complete. Why is the share price not near the recommended offer,
because we are in a bear market.
It’s obvious, even to an idiot . Even better news in that there is an extension to April, maybe
to dot the I’s and cross the t’s and flush out any other interest. Some people read too much
into scenarios and go off on a tangent of nonsense.
Something to think about
Seems Proactive are framing this as a 'done deal':
"The FTSE 100 has dropped 40 points lower after falls from Rentokil, Entain and Melrose continued to offset a 6% surge in DS Smith's shares.
DS Smith's jump comes after fellow packaging rival Mondi confirmed a takeover bid had been accepted, paving the way to create a £10 billion industry giant".
Sloppy reporting, or are we all missing something?
Jupiter, Why International Paper specifically?
Hi jupiter - I read somewhere recently that Amazon were keen to secure their own cardboard box supplier - maybe they're looking at this situation, too?
A cash deal would be 'small change' for them, after all - sasa.
Hi Trouts,
"We're actually at 346p. What does this suggest?"
To me it suggests 2 things. One that the market is factoring-in a possibility (if not a probability) that this won't actually happen. There could be sufficient shareholders on either side (SMDS, or MNDI) that vote against it to stop it happening - SMDS because the "deal" isn't high enough, and MNDI because it's giving too much of a premium to SMDS. The other is the "time value of money" - this whole process could take several weeks if not months. But there again, what do I know?
Whatever happens, ATB!
Mike.
So with MNDI currently sitting at 1356p as I write, SMDS should be priced at 366p (given the stated correlation between the offer price and proportions). We're actually at 346p. What does this suggest? The market doesn't believe this will actually happen? There are more risks to this going ahead?
Thoughts anyone?
I really hope International Paper come in here with a bid. Would they really want to be pushed into no 2 spot globally after the recent Smurfit/Westrock merger?
Feels like a really opportunistic bid taking advantage of market conditions by Mondi (as they know the long term value here) with not much pushback from Smds on price.
I own both SMDS and Mondi. A lot more of the former than the latter. Since the news broker, I'm well up on SMDS and about even with Mondi. Not sure what to do now to be honest! But so far the market doesn't seem to hate this from Mondi's perspective so just sitting tight.
I find two things about this somewhat odd:
The MNDI price kicked off this morning well down, but as you say is now picking up.
If you look on the MNDI chat board there is zero mention of any of this! It's as if they don't know, or maybe care, about what is happening. Oh well.
Thanks Oldfortyniner!
I think I'll be watching the Mondi price like a hawk this morning - it seems so far to be creeping upwards - 1,358p as I write.
Well put, Mike! It has to be so because the agreed ratio of ownership in the combined group has to be 54% Mondi 46% Smith.
Thanks johnychainlocker!
We can but hope!