US bidder says DS Smith will stay in London

THE US paper giant bidding for one of Britain’s biggest packaging firms has pledged to establish a European headquarters in London and list shares in the City.

Having hijacked a proposed takeover of DS Smith by fellow fTSE 100 firm Mondi last week, International Paper came clean over its plans should its £5.7bn takeover offer be successful.

The update came after the Mail revealed the Americans were looking at a secondary listing on the London Stock Exchange and intended to fold their European operations into DS Smith – founded in London in 1940 – in an effort to make its offer more appealing.

Confirming those reports yesterday, International Paper said it is ‘proposing to establish a European headquarters in London at DS Smith’s existing headquarters’. The Memattempt phis-based company added it would ‘seek a secondary listing of its shares on the London Stock Exchange’ alongside its main listing in New York.

The proposals are seen as an to bolster its chances in a bidding war with Mondi, whose plans would see the combination of two fTSE 100 firms rather than the takeover of one by a foreign rival.

A London-listing by International Paper would be a boost for the stock exchange amid an exodus of companies in what has been dubbed a takeover ‘feeding frenzy’.

‘The Government has made conscious efforts to attempt to woo more international firms, with listing reforms ongoing, so it would be notched up as a significant sign of progress,’ said analyst Susannah Streeter at Hargreaves Lansdown.

The US giant last week offered to pay £5.7bn for DS Smith, blowing an earlier bid worth £5.1bn from Mondi out of the water.

But if the deal goes ahead, it still means another British company falling into foreign ownership.

International Paper chairman Mark Sutton said combining the two companies ‘is a logical next step’.