(Reuters) - UK-based packaging group DS Smith Plc has offered to buy Spanish rival Europac for an enterprise value of 1.9 billion euros ($2.2 billion) to strengthen its business in western Europe and its supply chain, it said on Monday.
"Europac's Board of Directors has confirmed that the acquisition is friendly and attractive," DS Smith said in a statement, adding that it had received undertakings to accept the offer from shareholders owning 58.97 percent of the company.
DS Smith said it planned to finance the deal by raising 1 billion pounds ($1.34 billion) through the issue of new shares, plus a new debt facility of 740 million euros.
The offer price of 16.80 euros per share compares with Europac's Friday close of 15.58 euros, valuing Europac's equity at 1.67 billion euros. DS Smith also proposes to take on Europac debt, giving the deal a total value of 1.9 billion euros.
DS Smith said the offer valued Europac at 8.4 times EBITDA (earnings before interest, tax, depreciation and amortisation) for the 12 months to March 31 2018.
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The company said it expected annual pre-tax cost savings of 50 million euros, and further integration benefits.
The deal is conditional on receiving acceptances from Europac shareholders representing at least 50 percent plus one share of the entire share capital of Europac, receipt of regulatory approvals and the approval of DS Smith's shareholders, the company said.
($1 = 0.8562 euros)
($1 = 0.7483 pounds)
(Reporting By Justin George Varghese in Bengaluru; Editing by Georgina Prodhan)
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