By Ian Walker
DS Smith shares jumped after the company said it has received a highly preliminary expression of interest from larger peer Mondi over a possible offer, but that no proposal has been received at this stage.
DS Smith shares at 1300 GMT were up 27.80 pence at 308.90 pence, leading the FTSE 100 index risers. However, they are currently down 12% over the past 12 months. Mondi shares are down 54.50 pence, or 3.95%, at 1,326.50 pence and are down 11% over the past 12 months.
The London-listed packaging company said Thursday that there is no certainty a deal will be struck, nor the terms of any proposal.
Any deal would create a company worth 10.365 billion pounds ($13.09 billion) based on each company’s current market values.
Mondi has until March 7 to either make a formal offer or walk away under U.K. Takeover Panel rules.
Mondi later acknowledged that it is in the early stages of considering an all-share merger with DS Smith saying that it believes a deal would “create an industry leader in European paper-based sustainable packaging solutions.”
It said the company routinely considers options within its capital allocation framework to boost growth in the packaging sectors in which it operates.
Mondi also said that there’s no certainty any offer will be made to buy DS Smith.
Write to Ian Walker at [email protected]
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