Ireland's Smurfit aims to see off takeover with Dutch acquisition

DUBLIN (Reuters) - Smurfit Kappa SKG.I has agreed to buy Dutch paper and recycling firm Reparenco for about 460 million euros ($539 million), the Irish packaging group said on Thursday, in its effort to see off a takeover bid from U.S. rival International Paper (IP) IP.N.

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Smurfit said the acquisition of the privately-owned business accelerated its strategic objectives under a four-year plan laid out in February when it said it would increase investment in its existing businesses by 1.6 billion euros.

Negotiations to buy the business that generated 41 million euros of core earnings in the 12 months to April 2018 began on Feb. 1, Smurfit said, before IP made its first approach.

“The acquisition of Reparenco is complementary with our existing business; strengthens our integrated business model; and accelerates a central element of our medium term plan,” Smurfit Chief Executive Tony Smurfit said in a statement.

Smurfit Kappa twice frustrated a bid to combine the largest listed U.S. paper packaging firm with Europe’s biggest, most recently rejecting a raised takeover offer from IP in March, arguing it was better served pursuing its future independently.

IP, whose cash and shares offer in March valued the Irish group at 8.9 billion euros, said last week it would not make a hostile bid after being given until June 6 to make a binding offer or walk away. [nL5N1SN36L]

The Financial Times reported on Wednesday that a trio of Smurfit shareholders have asked the Irish firm to enter talks with IP. [nL3N1SU61Q]

It quoted British asset management firm Janus Henderson Group PLC JHG.N, which holds a 4.3 percent stake, as saying Smurfit should either get around the table to seek a higher price or explain why it was not engaging.

A spokeswoman for Smurfit said she had no comment on the report. Smurfit’s CEO told an analyst call on the Reparenco deal that the board was unanimous in rejecting IP’s unsolicited approach.

An IP spokesman said the company was confident that engagement with Smurfit would unlock the deal’s value potential.

($1 = 0.8530 euros)

Reporting by Padraic Halpin