Smurfit Stone, the packaging company that emerged last year from the merger of Jefferson Smurfit Corporation and Stone Container, has agreed to sell its remaining 22 per cent stake in Canadian newsprint group Abitibi Consolidated. The 41 million shares will be sold to a single buyer, Bunting Warburg Dillon Read, in an underwritten transaction at a price of 15.65 Canadian dollars, which is around US$10.10 (€10.72) each, a company spokesman said.
This is slightly below the price the company got for a 3.75 per cent stake in Abitibi, which it sold last January at a price of $10.25 per share to make a total of $80 million. However, the current sale is of a significantly larger stake.
The disposal of the 22 per cent stake will yield net cash proceeds of around Can$617 million or $422 million (€448 million) which will be applied to debt reduction, Smurfit Stone said. It expects to complete the transaction on April 23rd, subject to customary conditions.
Smurfit Stone previously announced its intention to sell its holdings in Abitibi Consolidated as part of its plan to reduce debt and concentrate on its core packaging business.
Smurfit Stone is the leading US manufacturer of paper and paperboard-based packaging. Jefferson Smurfit Group holds a 34 per cent stake in the merged company, which is due to release first-quarter results later today.
