Betaville smokes out Mondi's £5bn+ takeover approach for London-listed rival DS Smith
On the morning of 8th Feb 2024 Betaville published a paywall protected UNCOOKED Alert re. the renewed takeover rumours circulating about SMDS and highlighted one of the rumoured acquirers as MNDI. An hour and a half later SMDS confirmed it had received an approach from MNDI to create a £10bn packaging giant. SMDS shares initially rose 16% on confirmation of the Alert. Other Betaville Intelligence Alerts that have recently been confirmed include Italy-listed oil refiner Saras and Germany / US-listed pharmaceutical company MorphoSys.
Edition: 180
- 23 February, 2024
Materials
Teun Teeuwisse’s short thesis remains intact post H1 results - SMDS has failed to benefit from the exploding demand for boxes as it has been unable to improve profitability. As such, the revenue and box volume growth are irrelevant, even though this is exactly what management focuses on to display its "outstanding" performance. Debt remains high and hidden debt (inflated payables / reverse factoring, factoring, the outstanding liability on the interstate put option and deferred capex liability) is at least double the reported debt level. When demand eases things will quickly turn ugly.
Edition: 126
- 07 January, 2022
DS Smith (SMDS LN) UK
Materials
Following a review of the company’s FY results Teun Teeuwisse's short thesis remains firmly intact - FCF beat was driven by stretched payables and was not reflected in lower net debt. Management like to apply all sorts of definitions to prove the company’s quality, but in reality the quality of results remains weak and SMDS has hidden debt which is at least the size of its reported debt. Recent share price strength has been driven by rumours of a takeover by Mondi, but Teun continues to regard any bid as highly unlikely.
Edition: 113
- 25 June, 2021