RockTenn Deal For Smurfit-Stone Paper Sector Lifts - Boursier.com

By Christopher Hinton, MarketWatch

NEW YORK (Dow Jones) - Less than a year of bankruptcy, said a thin Smurfit-Stone Container Corp by RockTenn Group Co. would be purchased for about 3.5 billion U.S. dollars, making it North America's second package containing board.

New lights facing the industry on Monday, raising hopes of more consolidation, the capacity of containers on board and prices, which bring you down. Industrial demand has been gradually recovering after the recent recession, with high capacity, low inventories and limited supply growth.

The agreement, announced Sunday evening, values, Smurfit-Stone / quotes/comstock/13 *! NVE / Quotes / nls / NVE (SSCC 34.84, 7.32, 26.60%) to $ 35 per share, representing a 27% premium over its closing price day before. Investors pushed the stock higher than $ 35.80 on hopes of a possible bid-cons.

Also promoting the shares of International Paper Co. / quotes/comstock/13 *! Ip / Quotes / nls / IP (IP 28.85, 0.94, 3.37%), the industry's largest manufacturers of cards containing, as its rival Temple Inland Inc. / * Quotes/comstock/13! Tin / Quotes / nls / tin (tin 23.68, 0.95, 4.16%), Paper & Packaging Corp. Kapstone / quotes/comstock/13 *! ks / quotes / nls / ks (KS 16.44, 0.68, 4.31%) and Boise Inc. / quotes/comstock/13 *! bz / Quotes / nls / BZ (BZ 8.49, 0.26, 3.10%)

Actions RockTenn / quotes/comstock/13 *! RKT / Quotes / nls / rxn (RKT 58.93, 1.75, 3.06%) added almost 5% to $ 59.94.

"The company will really go near the GDP, they grow up and is much more stable," said President and CEO James Rubright RockTenn, during a conference call with analysts.

U.S. stocks started the week higher

Shares expected to move more in the middle of a deluge of earnings reports this week and the currencies fluctuate depending on the attack against the airport in Russia.

Combine RockTenn and Smurfit-Stone share market bumps in the top five producers of 72% to 74%, according to data from Credit Suisse.

Norcross, Ga.-based RockTenn said the agreement with Smurfit-Stone is expected to close in the second quarter, and add the result to the 2012 fiscal year, which begins in September.

Annual turnover, revenue from consumer packaging, displays and specialty paperboard products are expected to more than nine billionth $

"We get about $ 8.75 per share earned in fiscal 2012 RockTenn, 33% above our current estimate of $ 6.60," Credit Suisse said in a research note to clients. "In fiscal 2013, a less robust, more" normal "year in our forecast of containers on board, we see approximately 5% growth, which is about $ 6.70 per license RockTenn share, compared our estimate of $ 6.40 based on 50% gain expected synergies. "

Before the agreement was announced, Credit Suisse an overweight rating and a price target of $ 72 on the part of RockTenn.

RockTenn estimated that about $ 150 million synergies within two years following completion of the transaction.

RockTenn plans for the cash transaction of 50% and 50% of the shares paid to shareholders of Smurfit-Stone about 44% of the new company. RockTenn will also assume $ 700,000,000 of net debt to 1.1 billion dollars of pension obligations in the transaction.

Smurfit-Stone provides a diverse customer base and reduced exposure to some recycling containers on board of the company, which has been under pressure over the last 10 years in China increases its capacity.

"The board of container and corrugated industry is a very good deal, and U.S. Virgin container board is a very comprehensive strategic asset," said CEO Rubright. "With this acquisition ratio RockTenn input fiber 55% and 45% of virgin materials will be recycled."

Wells Fargo Securities acted as exclusive financial advisor to King & Spalding LLP RockTenn with legal counsel.

Smurfit-Stone's financial adviser Lazard Ltd., and its legal advisers were Wachtell Lipton Rosen & Katz.

Christopher Hinton is a reporter for MarketWatch based in New York.