By Ian Walker
(Adds response from Smurfit Kappa.)
International Paper Co. /zigman2/quotes/200533549/composite IP -1.73% said late Tuesday that it won't go ahead with its proposed 8.9 billion-euro ($10.4 billion) offer for Smurfit Kappa Group PLC /zigman2/quotes/203625360/delayed SMFKY -5.41% , blaming a lack of engagement by the Irish company's board of directors and management.
"While we continue to believe in the strategic and financial potential of this combination, our commitment was to proceed in a disciplined manner that would create value for both sets of shareholders," said Mark Sutton, International Paper's chairman and chief executive.
The statement came before an Irish Takeover Panel deadline of 0600 GMT Wednesday
Responding to the announcement Smurfit Kappa said Wednesday that the board believes it has superior prospects as a standalone business and remains excited about the group's prospects.
It reiterated the company's expectations that 2018 earnings before interest, taxes, depreciation and amortization will be "materially" better than 2017. For the year ended Dec. 31 the company reported adjusted Ebitda, which out strips acquisitions, disposals and other one-off items, of EUR1.24 billion.
"We expect the second quarter to represent another strong performance and we will provide a further update at the time of our half year results on August 1st," said Chief Executive Tony Smurfit.
Smurfit Kappa has rejected two offers from International Paper since its first approach in February. The latest one--EUR25.25 in cash and 0.3028 new International Paper shares for each Smurfit Kappa share--was rejected, with Smurfit saying it believed shareholders' best interests were served by it pursuing its future as an independent company.
International Paper's first approach announced in March was EUR22 in cash and 0.3028 new International Paper shares for each Smurfit Kappa share.
International Paper previously said it wouldn't proceed with a bid without support from Smurfit's board.
Write to Ian Walker at email@example.com; @IanWalk40289749