Shareholders in packaging giant DS Smith PLC (LSE:SMDS) were quids in today as the value of merger partner International Paper Co (NYSE:IP, ETR:INP) rocketed on the back of third-quarter results.
Smith and INP agreed to merge in April through an all-share deal that valued the UK cardboard box giant at £5.8 billion not including debt.
Terms of the deal were for DS Smith investors to get 0.1285 shares in INP for each one of the UK packaging group they owned.
At the time, INP shares were trading at US$40.85 but after today’s third-quarter announcement were changing hands at more than US$55, a 34% jump.
INP rose today after it announced it had beaten earnings forecasts by 83% and was considering options for its cellulose fibres business.
At US$55, INP is valued at US19.2 billion with Smith shareholders to own 33.7% of the enlarged company on completion of the merger.
Shares in Smith were up 14% at 543.5p, valuing the FTSE 100 group at £7.6 billion.