Smurfit Kappa has rejected an “unsolicited and highly opportunistic” takeover approach from International Paper Company of the US.
The proposed acquisition would have meant International Paper paying cash and shares for Smurfit Kappa, leaving shareholders of the Dublin-based company with a minority stake in the combined business.
Smurfit Kappa said the proposal failed to reflect its strong growth prospects as Europe's biggest producer of paper-based packaging or the healthy outlook for its industry. The FTSE 100-listed company operates in Europe and the Americas and has about 46,000 employees.
The proposal shows International Paper rekindling interest in Smurfit Kappa after reportedly considering a £6bn approach in 2015. Smurfit Kappa's market value is now £6bn, indicating an approach would have to be substantially higher.
Liam O'Mahony, Smurfit Kappa's chairman, said: “The board of Smurfit Kappa has unanimously rejected this unsolicited and highly opportunistic proposal. It does not reflect the group's true intrinsic business worth or its prospects. We strongly advise shareholders to take no action.”
O'Mahony pointed to Smurfit Kappa's strong recent results when it announced record earnings for 2017. Europe contributed 75% of earnings and demand in Europe is forecast to grow strongly over the next few years, the company said. Along with its large Latin American business Smurfit Kappa is in a unique position to capitalise on growth in the industry, it added.