Smurfit Kappa Group PLC (LON:SKG) will not face a hostile takeover bid from US-based packaging and paper products giant International Paper Co. (NYSE:IP).
In a statement on Wednesday, International Paper confirmed that it will not make an offer for its Ireland-based, FTSE 100-listed rival “given the lack of engagement by Smurfit Kappa's Board of Directors and Management.”
READ: Smurfit Kappa agrees to buy Dutch paper firm Reparenco in snub to International Paper takeover bid
International Paper’s chairman and chief executive Mark Sutton said: "While we continue to believe in the strategic and financial potential of this combination, our commitment was to proceed in a disciplined manner that would create value for both sets of shareholders.”
He added; “Moving forward, we remain focused on executing our strategy and are excited about our outlook. We have many levers to create shareholder value and will be responsible stewards of our shareholders' capital,"
International Paper made an initial offer for Smurfit Kappa in February, which was rejected, and then made a revised proposal on March 26, which was again rejected by Smurfit Kappa.
Superior prospects as a standalone business
In a reaction to the International Paper statement, Smurfit Kappa said it believes it “has superior prospects as a standalone business and remains excited about the Group's prospects in the short, medium and long-term.”
Smurfit Kappa Group CEO, Tony Smurfit, added: “We continue to see the benefits from our investments in recent years and we are now executing a central element of our Medium Term Plan with the acquisition of Reparenco.
“The acquisition of Reparenco will have a positive impact on our integrated model and we are targeting delivery in excess of €30mln of synergy benefits.”
He added; “Strong business conditions and a positive operating environment together with significant and early progress against our Medium Term Plan reaffirms our confidence that 2018 EBITDA will be materially better than 2017.
“We expect the second quarter to represent another strong performance and we will provide a further update at the time of our half year results on August 1st.”
Shares in Smurfit Kappa closed at 2,920p each on Tuesday, giving it a market capitalisation of £6.93bn, compared to International Paper's US$23.68bn valuation.
-- Adds Smurfit Kappa response statement --