PE Bidders Circle DS Smith Unit at Under $6B, Lifting IP Shares 6.3%
IP sits 16% above its 52-week low of $29.26.
Summary
Lone Star and Atlas Holdings are the last two private equity bidders in talks to buy International Paper's EMEA packaging business, formerly DS Smith, per an FT report. Offers may value the unit at less than $6 billion — well below the £5.8 billion IP paid for DS Smith in 2024, so a sale would crystallize a loss on that acquisition. Shares rose 6.3% on the news, as a cash sale would let IP exit a business that has been dragging results: Q2 sales missed at $6.0 billion and Q3 EBITDA guidance came in below consensus on soft EMEA demand. IP said Wednesday it had made significant progress preparing to spin the unit off as a standalone public company called DS Smith plc, so a PE deal is an alternative to that separation. No decisions are final and IP could still pursue the listing.
At the time of this announcement, IP was trading at $33.90 on NYSE in the Manufacturing sector, with a market capitalization of approximately $18B. The 52-week trading range was $29.26 to $50.25. This news item was assessed with positive market sentiment and an importance score of 8 out of 10. Source: Seeking Alpha.