DS Smith shares soar: Amazon cardboard provider could be one half of biggest City deal in years
Packaging giant DS Smith could be the subject of a takeover bid from fellow London-listed rival Mondi.
Whispers of a deal, which would create one of the world’s largest makers of packaging supplies, have emerged over recent days.
DS Smith shares jumped 11 per cent on the news. The firm’s market capitalisation sits north of £4bn so a takeover bid from Mondi – complete with a premium – would involve a significant sum.
Should it come to pass it would be another major tie-up between London-listed operations, with housebuilders Barratt and Redrow looking to turn two listed firms into one.
The company updated markets this morning saying it “notes the recent media speculation and confirms that it has received a highly preliminary expression of interest” from a “combination” firms.
DS Smith, which has been listed on the London Stock Exchange since 1950s, said it “understands” Mondi is thinking of making an offer but “no proposal has been received at this stage.”
However, FTSE 100-listed Mondi confirmed in a seperate statement that it was in the “early stages” of considering a possible all share combination with DS Smith.
“Mondi believes that a possible all share combination with DS Smith represents an exciting opportunity to create an industry leader in European paper-based sustainable packaging solutions,” the statement said.
It added that there could b e “no certainty” that an offer to acquire the company would be made.
Following the announcement, Mondi saw its share price drop by more than two per cent, while DS Smith’s rocketed by almost 12 per cent.
DS Smith is the provider of cardboard packaging for tech and delivery behemoth Amazon.