Bidding war erupts for packaging giant DS Smith

A TRANSATLANTIC bidding war has broken out for London-listed packaging group DS Smith.

The FTSE 100 firm last night said it is in talks with US rival International Paper over a possible takeover offer worth 415p a share or £5.7bn.

The discussions come just weeks after DS Smith threw its weight behind a lower offer of 373p a share or £5.1bn from fellow Footsie group Mondi. That would have created an £11bn packaging giant listed in London.

But the proposed tie- up has been hijacked by International Paper – and could lead to DS Smith becoming the latest British firm to be gobbled up by foreign predators. Shares in DS Smith – which soared last month after the approach from Mondi – are set to jump higher still today.

The stock closed up 2.7pc, or 9.6p, at 359.8p yesterday before the latest offer from the US was announced.

DS Smith employs more than 30,000 staff and has been listed since 1986. The company makes products such as trays to carry cans and bottles and packaging for food.

The FTSE 100 company said its board ‘acknowledges the strategic merits and potential for value creation through a combination with International Paper’.

Tennessee-based International Paper, which makes products such as wooden crates for fruits and vegetables, has until April 23 to say whether it wants to table a formal bid or walk away.

Mondi will also come under pressure to improve the terms of its offer or abandon its plans to join forces with DS Smith.

DS Smith is just the latest London-listed firm to be targeted by foreign buyers in a wave of takeover interest that has raised concerns that UK companies are undervalued and vulnerable to bargain hunters.

A string of British businesses have been approached in recent weeks including Currys, Direct Line, Wincanton, Spirent and All3Media.