Mondi Plc - Statement re possible all share combination with DS Smith plc-agreement in principle and extension of PUSU deadline
Incorporated in
Registered number: 6209386
LEI: 213800LOZA69QFDC9N34
LSE share code: MNDI ISIN: GB00BMWC6P49
JSE share code: MNP
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
THIS ANNOUNCEMENT IS AN ANNOUNCEMENT UNDER RULE 2.4 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CODE AND ACCORDINGLY THERE CAN BE NO CERTAINTY THAT ANY TRANSACTION WILL PROCEED
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
Agreement in principle and extension of PUSU deadline
The Boards of
Proceeding with the Combination is conditional on, inter alia, reaching agreement on the other terms and conditions of any offer, including as to regulatory matters and the completion of mutual confirmatory due diligence to the satisfaction of
Key Terms of the Combination
-- Mondi shareholders would own 54 per cent. and DS Smith shareholders
would own 46 per cent. of the issued and to be issued share capital of
Mondi ;
-- Based on Mondi's closing share price of 1,381 pence per share on 7
February 2024 (being the day prior to the commencement of the offer
period), the terms of the Combination would represent an implied value
of 373 pence per DS Smith share and a premium of 33 per cent. to DS
Smith's closing share price of 281 pence per share on 7 February 2024
(being the day prior to the commencement of the offer period);
-- Philip Yea would be Chair, Andrew King would be the Chief Executive
Officer and Mike Powell would be the Chief Financial Officer of the
enlarged Mondi Group ; and
-- Three Non-Executive Directors of DS Smith are expected to join the
enlarged Mondi Group Board.
Compelling Strategic and Financial Rationale for both
The Combination is an exciting opportunity to create a pan-European industry leader in paper-based sustainable packaging solutions, with complementary geographic footprints, leading customer relationships, a strong balance sheet and cash flow profile, and the potential to deliver substantial benefits to respective shareholders, customers, employees and related stakeholders.
The key benefits of the Combination to both sets of shareholders include:
-- Increased exposure to structural growth trends in sustainable packaging;
-- A highly complementary geographic footprint creating a leading player in
corrugated packaging across Europe ;
-- Combining both Mondi's and DS Smith's strengths in the corrugated value
chain:
o Cost efficient virgin containerboard mills;
o A market leading, well located converting network, focused on
delivering innovative solutions for customers; and
o Strategically located and integrated recycled containerboard
production;
-- Enhanced vertical integration brings with it a more balanced paper
position;
-- Strengthened ability to serve global FMCG customers, leveraging proven
innovation capabilities of both Mondi and DS Smith ;
-- Significant value creation for both Mondi and DS Smith shareholders from
substantial synergies (refer to "Expected Synergies" below);
-- The benefit to the Combination of Mondi being a global leader in
flexible packaging;
-- A strong balance sheet, supported by a solid investment grade credit
rating, and strong cash flow profile providing greater resilience
through the cycle and strategic flexibility for continued growth
investment;
-- A strong customer focus, building on the expertise of two well regarded
and highly experienced management teams, driving innovation and
delivering value to customers; and
-- Commitment to sustainability in packaging with a complementary portfolio
of products, joining forces to spearhead the shift towards a more
circular and sustainable economy.
Expected Synergies
In reaching agreement in principle on the key terms, both Boards have taken into account the substantial synergies which they believe would arise from combining the two pan-European companies, and the consequent significant added value which should accrue to shareholders in the Combination.
These synergies are expected to result from vertical integration alongside highly complementary positions and expertise in containerboard, corrugated solutions and flexible packaging, as well as expected benefits from economies of scale and efficiencies across a combined supply chain and administration.
Extension of the PUSU deadline
In accordance with Rule 2.6(a) of the Code,
In accordance with Rule 2.6(c) of the Code, the DS Smith Board has requested that the Panel on Takeovers and Mergers (the "Panel") extends the relevant deadline, as referred to above, to enable the parties to continue their discussions regarding the Combination. In light of this request, an extension has been granted by the Panel and
There can be no certainty that any firm offer will be made. This announcement has been made with the consent of each of
The person responsible for arranging for the release of this announcement on behalf of
Enquiries
Investors/analysts:
Mondi Group Head of Investor Relations
Rothschild & Co (Lead Financial Adviser to
FTI Consulting
Investors/analysts: +44 (0) 20 7756 1800
Citi (Financial adviser and corporate broker to
J.P. Morgan Cazenove (Financial adviser and corporate broker to
Important Code notes
The parties reserve the right to amend the terms of the Combination, including to be on less favourable terms for either party with the agreement or recommendation of each other. The parties reserve the right to adjust the terms of the Combination to take account of the value of any dividend or other distribution or return of capital which is announced, declared, made or paid by either party after the date of this announcement other than ordinary course agreed dividends, further details of which will be set out in any firm offer announcement.
Important Notices
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than
If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the
Rule 26.1 disclosure
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.mondigroup.com and www.dssmith.com by no later than 12 noon (
The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.
Other
UBS AG London Branch is authorised and regulated by the
This announcement and the information within it is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, or subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. In particular, this announcement is not an offer of securities for sale into
This announcement has been prepared in accordance with English law and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside
The distribution of this announcement in jurisdictions other than the
Editor's notes
In 2023,
Sponsor in
