Australian packaging giant Amcor Ltd appears set to expand in Europe with the likely announcement dated 6 April, of a three-way merger on the Continent.
Analysts today welcomed the news, which broke…
Australian packaging giant Amcor Ltd appears set to expand in Europe with the likely announcement dated 6 April, of a three-way merger on the Continent. Analysts today welcomed the news, which broke by accident when Amcor mistakenly sent invitations for a briefing with managing director Russell Jones to media outlets, about the news conference to announce the deal. The error was uncovered and processing of the e-mails was halted. The media invitation said: “Following the announcement by Amcor today regarding the three-way merger in Europe, you, or another representative of your department, are invited to attend a news conference at 3pm today, 6 April, to discuss the acquisitions with Russell Jones, Managing Director, and other Amcor executives.” Amcor“s corporate affairs spokesman John Murray said “someone had pressed the wrong button” but would not confirm whether the company was about to announce a new deal. Earlier in the day Amcor had called for a trading halt on its shares pending the announcement. The stock was at A$ 5.76, up six cents, when trading was halted. Mike Hawkins of JB Were said Amcor had the proceeds from the spin-off and float last year of paper merchant PaperlinX amounting to between US$ 400 million – 500 million. “Amcor has been demonstrating the ability to put that cashflow to work in a fairly profitable way,” Mr. Hawkins said. “If the speculation proves right and, depending on the detail, the market could welcome this development. “Amcor has got valuations around the US$ 650 million level.” Earlier this year Amcor acquired US PET beverage container producer CNC Containers Corp for US$ 370 million. In January 2001 Mr. Jones signalled Amcor“s plans to expand in Europe, ready to outlay around US$ 450 million for niche packaging businesses. Since taking over the top job in April 1988, his ambition has been to turn Amcor into a global packaging company 30 to 50% bigger than it is now. Annual revenue is about US$ 6 billion, and for the group to reach its target of being a top-five global player in pure packaging, that would need to increase to more than US$ 9 billion. Offshore institutions make up more than 25% of Amcor“s share register, compared with about 19% in mid-1999. Amcor recorded a half year net profit of US$ 123 million for the six months to 31 December 2000 with Mr. Jones expecting the second half of the year to match or better the corresponding period last year. Amcor said that the securities will remain in pre-open until, either the announcement is made to the market, or until the start of trading on Monday, 9 April.