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Good post @MikeM
Dear all,
The relevant key sentence in yesterday's "joint" MNDI/SMDS RNS announcement seems pretty clear:-
"Based on Mondi's closing share price of 1,381 pence per share on 7 February 2024 (being the day prior to the commencement of the offer period), the terms of the Combination would represent an implied value of 373 pence per DS Smith share and a premium of 33 per cent. to DS Smith's closing share price of 281 pence per share on 7 February 2024 (being the day prior to the commencement of the offer period)".
So the SMDS price is now linked to the MNDI price, rather than to any cash figure.
Given that the MNDI price was about 1,344p when I started to type this, that puts SMDS at about 363p.
(373p x (1344/1381)).
However, the MNDI price has now risen a bit, to about 1,352p, which would put SMDS at about 365p.
I'm guessing that SMDS management would have consulted with a number of large shareholders before "agreeing in principle" the construct of the offer, and therefore MNDI don't have any incentive to increase the offer, unless another bidder comes in.
The MNDI share price would have to go above 1381p for the "implied value" of SMDS shares to go higher than 373p - what's the chance of that happening?
ATB, Mike.
Not sure SKG would be looking to digest another acquisition so soon after Westrock. I'm looking at International Paper as the biggest player in the market to hopefully make a move although there could be plenty of potential suitors as this market looks ripe for consolidation. GLA
https://www.elitecustomboxes.com/packaging-companies/
"Hopefully the bid will bring out some American money." I am not as experienced as many of you on here. But surely if the market was expecting counter bid the price would be higher but it has not even got to Mondis 373. Hope I am wrong in my thinking
Applying the same ratio to Mondi's December high of 1563 gives an equivalent of around 420pps - more like it, but not exactly generous ! Would like to see this higher but can't see it unless there is an increased or rival bid, or at least a credible rumour of one !
MMs playing with this to shake out weak sellers. I expect the SP to get to 373 at some point. Then we’ll wait and see if any other bidders weigh in. Maybe SKG can come on board? DYOR IMHO
Thats why we are missing another 15-18% on top of current 373p offer. That would put SP into my range of 400-450p which I have stated several times now.
"which is a premium of 33% to the closing share price on Thursday." Someone is not very good at arithmetic! It may be 33% premium to where SMDS were at the time of the initial interest, but only about 15% to yesterday's close.
(Sharecast News) - Packaging firm Mondi has agreed to buy smaller rival DS Smith for £5.1bn.
In a joint statement after the close on Thursday, the firms said the agreement in principle has an implied value of 373p per DS Smith share, which is a premium of 33% to the closing share price on Thursday.
The offer is not 373, it's Mondi shares worth 373 at the time of the offer. They are down over 3% this morning.
344p for me , ofer is 373p
Open around 349. Markets devaluing Mondi's shares or not sure it will happen
Bloomberg stated that Mondi was looking to up their offer... wth is that? 373p ?? So what was thei innitial offer? Did Mondi try lowball DS Smith business valuation? Better offer is required NOW
Well they all know the price to beat now. This opportunity won’t come around again.
Counter bid from International Paper would be nice!
Hopefully the bid will bring out some American money.
There's hopefully a chance of a counter bid from another player yet
It's not a great deal for shareholders, but no doubt the directors are being well looked after with their new jobs within the new co and large pay rises to much,so what do they care?
Who knows? 373p whether it's shares or cash is on the low side IMHO. They will have to look under the sofa for some more pennies. Maybe there will be some other sharks wanting a nibble who might declare their interests now. I think 400p is a more reasonable offer yet still may be rejected by SMDS. Anyway, fun times.
I Think its a done Deal Most of the Board of Smiths have jobs in the New combined Group
We will see tomorrow what the market thinks. I don’t think it’s enough.
It's an agreement in principle so not definite yet- I should have added 'in principle' to my header. Work to do behind the scenes no doubt. It's hard to see where another bid will come from but Mondi will hold the cards as they will want over 50% of the new entity.
"Should jump to 373p"
I'd be surprised. It's not a done deal - and it's in shares not hard cash. My guess is somewhere in the 360s.
Should jump to 373p with plenty of volume. People will be setting their limit sells around there already.
No Lurka, it is is still not a firm offer.
That is why it is extended to April 4th.
As I said I think both sides will have sounded out some large shareholders to see if they were happy with it,.It will still need shareholder approval if a firm offer materialises