DS Smith PLC (LSE:SMDS) said it is continuing talks about being taken over by fellow paper and packaging group Mondi PLC (LSE:MNDI), after receiving a higher bid last week from US rival International Paper Co (NYSE:IP, ETR:INP).
Earlier last month, Smith and Mondi agreed to a £10 billion merger before the US group, which is slightly larger than the two FTSE 100-listed companies put together, came in with a cash and shares bid valuing Smith at 415p a share or £5.14 billion in total.
Today, Smith said it has reached a new agreement in principle about a possible all-share offer by Mondi, where the South African group would acquire the entire share capital of DS Smith.
Accordingly, the put-up-or-shut-up (PUSU) deadline for Mondi has been extended to 5pm on 23 April to iron out more details (or wait for a bigger offer from the Americans).
"DS Smith is continuing discussions with Mondi regarding the combination," it said in a statement, noting that there was no certainty that any firm offer will be made.