Suzano seeks debt to acquire International Paper for potential industry leadership

From Investing.com: 2024-06-09 16:35:15

Brazilian pulp and paper company Suzano is seeking $19 billion in debt to potentially acquire International Paper. Jefferies analysts predict a cash offer of $54-57 per share for IP. Suzano aims to become a global industry leader with strong cash generation. IP shareholders are unlikely to accept Suzano stock due to falling share prices.

The reported $19 billion debt would increase Suzano’s leverage to 5.9 times its 2024 estimated earnings. Shareholders may reject any offer below the mid-$50s in cash. If linerboard prices increase by $50 per ton, IP’s EBITDA could rise by $550 million. Optimally, IP’s shares could reach $90 if certain conditions hold.

Mixed investor sentiments, potential deals, and stock performance complicate the decision on an equity component. Jefferies analysts maintain a Buy rating on IP with a price target of $57.



Read more at Investing.com: Suzano eyes debt financing for potential International Paper deal