International Paper Co (IP)

International Paper (IP) stock dropped by 6.49% due to reports that the company is poised to enter a bidding war for British rival DS Smith. This move by International Paper is seen as an attempt to disrupt a planned deal between DS Smith and London-based Mondi. Investors are concerned that International Paper may have to pay a higher price in the bidding war, leading to a decline in its stock price.

• Bidding War for DS Smith: The paper and packaging industry is undergoing consolidation as companies readjust capacity and expectations following a post-pandemic shipping surge. Last year, Irish company Smurfit Kappa Group agreed to acquire WestRock for $11.2 billion. Earlier this month, Mondi made a $6.58 billion offer (373 pence per share) to acquire DS Smith.
• International Paper's Potential Counteroffer: Now, International Paper is reportedly in talks with DS Smith about a potential counteroffer. The proposed counteroffer would value DS Smith at between 400 pence and 420 pence per share. International Paper's size and financial strength could give it an advantage in a bidding war against Mondi. However, investors are concerned about the potential dilution that could result from an all-stock deal and how far International Paper is willing to go in the bidding war.
• *Investor Concerns: Investors are closely watching the developments of the bidding war and are concerned about the impact on International Paper's financials and stock price. The uncertainty surrounding the outcome of the bidding war has led to a decline in International Paper's stock price as investors weigh the potential risks and rewards of the company's aggressive bid for DS Smith.