Americans crashing Mondi bid for DS Smith plot UK listing should their deal go through

The US paper giant bidding for one of Britain’s biggest packaging companies is looking at listing shares in London should the deal go through.

In a dramatic move on Tuesday evening, International Paper hijacked a proposed takeover of DS Smith by fellow FTSE 100 firm Mondi.

The US company offered to pay £5.7billion for DS Smith, blowing Mondi’s £5.1billion bid out of the water.

Sources last night told the Mail that International Paper would consider a secondary listing on the London Stock Exchange alongside the company’s main listing in New York. 

The Americans are also looking at folding International Paper’s European operations into DS Smith, which would become a subsidiary led by the London-based firm’s current management.

Takeover target: In a dramatic move, International Paper hijacked a proposed takeover of DS Smith by fellow FTSE 100 firm Mondi

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

DS Smith was founded in London in 1940 as a family-run box-making business.

It now employs more than 30,000 workers in 30 countries and has been listed in London since 1986. 

The company makes products such as trays to carry cans and bottles, and packaging for food.

Last month, Mondi offered to pay 373p per share for the firm. Analysts said at the time that the proposal could leave the door open for a rival bid.

The American offer values DS Smith’s shares at 415p each. DS Smith said: ‘The board acknowledges the strategic merits and potential for value creation through a combination with International Paper.

‘Accordingly, the board is progressing its discussions with International Paper.’

It said it was also continuing its talks with Mondi.

Tennessee-based International Paper has until April 23 to make a firm offer. The bidding war comes amid an exodus of companies from the London Stock Exchange. 

US private equity giant KKR last week confirmed a £1.3billion takeover of Glasgow-based Smart Metering Systems. 

This month bosses of British haulage firm Wincanton backed a £762million offer from US logistics company GXO.

Last year, rival FTSE 100 paper and packaging firm Smurfit Kappa announced an £11billion mega-merger with US giant Westrock. 

Under the terms of the deal, which is yet to complete, Smurfit will move its primary listing to New York while retaining a secondary listing in London.

Earlier this year, investment bank Peel Hunt warned that the City faces a ‘relentless’ exodus of companies.

‘This is driven by the low UK valuations, which makes it an attractive hunting ground for acquirers,’ analysts said.