Antalis agrees takeover deal with Japanese giant Kokusai

Jo Francis
Tuesday, March 31, 2020

Shares in Antalis have spiked after the merchanting group announced that after more than a year its search for a new shareholder had resulted in a proposed deal with Japan’s Kokusai Pulp & Paper (KPP).

Antalis: set to become part of Kokusai Pulp & Paper after lengthy process
Antalis: set to become part of Kokusai Pulp & Paper after lengthy process

The acquisition is subject to a number of conditions and was announced this morning (31 March).

It will result in the creation of a €5.3bn (£4.7bn) merchanting giant selling some 3.3 million tonnes of paper worldwide.

Antalis is the biggest paper merchant in the UK and had sales of €595m in the UK and Ireland in 2018. Overall group sales were €2.3bn.

Its 2019 figures would usually have been published by now but are yet to be filed.

Shares in Antalis had been trading at a 52-week low of €0.35 earlier this week, but soared by 80% on the news, rising from €0.39 to €0.70.

KPP has sales of around €3.2bn and is listed on the Tokyo Stock Exchange. The deal marks its first foray into Europe. The group’s major shareholders include OJI Holdings and Nippon Paper, which had previously been tipped as potential buyers of Antalis.

KPP has agreed to buy the 75.2% stake in Antalis held by Sequana, which is itself in liquidation, at a price of €0.10 per share.

It has also agreed to buy the Antalis shares currently held by Bpifrance, an 8.5% stake, for €0.40 per share. This is subject to the transfer of shares held by Sequana to KPP.

Public investors hold the remaining 16.25% of the business. 

In addition, a financial restructuring has been agreed between KPP, Antalis and the providers of the merchant’s syndicated credit facility. Of Antalis’ existing €287.1m finance facility, €187m will be written off, with a new €100m financing deal put in place with Mizuho Bank.

The refinance is subject to the share purchase deal going through. The shares deal is also subject to a green light from the Antalis European Works Council and the supervisory judge at the Commercial Court of Nanterre, which is handling the liquidation of Sequana.

The deal is not subject to competition authority approval in any of the relevant jurisdictions.

In a statement, KPP said it wanted to grow through acquisition as part of its mid-term management plan.

“Antalis is one of the largest paper distributors in Europe, and they are distributing paper and paper-related products in 41 countries, mainly in Europe, including South America and Asia Pacific as a leading company.

“Their strength is in packaging business, high growth business post graphic paper, as well as visual communication business (sigh and display), and they are reforming business portfolio and investing in e-commerce business,” KPP stated.

It said its expectations included “a greater complementary relationship between Antalis with business base in European countries and KPP with base in Asia Pacific; and synergies in product development and branding improvement with Antalis”.

Antalis chairman Pascal Lebard said KPP’s backing would provide the company with “a long-term shareholder that will support its future development”, while Antalis chief executive Hervé Poncin added: “Antalis, its management and employees are very pleased with this combination with KPP which will allow it to open a new chapter in its international evolution. It will provide Antalis with the necessary means to support its development and strengthen its market position.”

Kokusai also acquired the former Paperlinx business in Australia, now called Spicers, last year.

When the deal is completed Japanese groups will control a large chunk of UK paper supply, after Japan Pulp & Paper acquired Premier Paper Group last summer.

The Antalis UK business entered a 30-day consultation with a number of employees last month as part of a streamlining exercise.

 

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