US rival International Paper walks away from £8 billion Smurfit Kappa bid

US cardboard giant International Paper officially walked away from its pursuit of London-listed competitor Smurfit Kappa on Wednesday with a final blast at top brass for snubbing the offer.

The Memphis-based group said it would not make a final offer for the packaging giant because of a “lack of engagement” by Smurfit chief executive Tony Smurfit and the board, led by chairman Liam O’Mahony.

International Paper, which had two bids rejected in February and March, is locked out of bidding for Smurfit again for at least 12 months under Irish takeover panel rules.

Smurfit, which employs 46,000 and is listed on the FTSE 100 as well as in Ireland, saw shares in the City rise 3% to 3004p after it said prospects were better going it alone. Tony Smurfit said he was confident underlying earnings this year would be better than last.

However, he is likely to face pressure from shareholders, led by top-three holder Janus Henderson, which had urged the board to engage with International Paper. Janus Henderson declined to comment on Wednesday

The last cash and share offer was €25.25 and 0.3028 new IP shares, making each Smurfit share worth €37.54 and giving the company a value of around €9 billion (£7.9 billion). Shareholders had hinted they wanted €40 per share.

But International Paper chairman and chief executive Mark Sutton said: “Our commitment was to proceed in a disciplined manner that would create value for both sets of shareholders.”

Shares had already fallen more than 8% on Tuesday as prospects for a deal faded.

During the takeover battle, Smurfit agreed a €460 million takeover of Dutch paper and recycling company Reparenco, which is set to deliver €30 million of cost savings for the company.