Mondi has pulled out of a potential bidding war to buy a rival packaging giant, opening the door for an American firm.
The Surrey-based company yesterday said it will not make a counter bid after DS Smith’s board recommended a £5.8billion takeover offer from US-based International Paper. Mondi had previously offered to buy DS Smith for £5.2billion but was outbid by the American group.
A Mondi spokesman said: ‘Following a period of due diligence, and after carefully considering the value the combination with DS Smith would deliver to shareholders, the board has decided that the transaction would not be in the best interests of its shareholders. Accordingly, Mondi does not intend to make an offer.’
Change of heart: Mondi had previously offered to buy DS Smith for £5.2billion but was outbid by the American group
The decision clears the way for the International Paper deal to proceed without a bidding war. A tie-up with the Tennessee-based firm would see DS Smith leave the FTSE 100 index of blue-chip companies.
But the combined group would seek a secondary listing in the UK meaning DS Smith would not entirely disappear from London’s stock market.
