DS Smith shares soar on bidding war prospect
DS Smith shares jumped to more than a two-year high after confirming it had talks with International Paper about an all-stock offer.
IGTV's Angeline Ong explains why this could be the start of a long bidding war for the British paper and packaging company.
(AI Video Summary)
DS Smith shares soar over talks with International Paper
DS Smith, a British company that deals with paper and packaging, is currently in discussions with International Paper (IP) about a possible deal. This deal would involve IP making an offer to DS Smith that is entirely in stock and worth a whopping £5.7 billion. To put it in perspective, this offer is a massive 48% more than DS Smith's closing price on 7 February.
The news of this potential merger has caused a lot of buzz in the market, and as a result, DS Smith's share price has shot up. If you were to look at their graph, you would see a bold black line representing the opening price, which matches the closing price of the previous session. On top of that, the volume of shares being traded has also increased dramatically.
Merger bidding war
Now, this merger between DS Smith and IP isn't all that surprising. Folks in the paper industry have been expecting something like this for a while now. In fact, Mondi, another player in the market, already made a preliminary bid, and it wouldn't be shocking if they came back with an even higher offer. You see, the packaging industry is currently thriving because of the surge in online shopping and deliveries. With more and more people buying things online, there is a higher demand for packaging materials, which makes this market very appealing to potential buyers. It's no wonder DS Smith's share price is skyrocketing.
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