Multi Packaging Solutions International Ltd. (NYSE: MPSX) shares jumped 23% as of noon EST today, on the news that the packaging company would be acquired by WestRock Company (NYSE:WRK) in a deal worth $2.3 billion, including nearly $900 million of debt.
Multi Packaging Solutions reported fiscal 2017 first-quarter results for the period ended Sept. 30, 2016, including sales down 11% year over year, and operating income down 6%. This follows similar struggles throughout 2016; before today, the stock was down 8% over the last year.
On the other hand, WestRock has been performing well lately. It just announced yesterday that it would sell other assets worth about $1 billion, seemingly in preparation for today's news. WestRock shares are up about 3% so far today, and are up more than 70% over the last year for a market cap, now, of $13.5 billion.
There's little value left to squeeze out of Multi Packaging Solutions' stock, now that the merger news is announced and shares have jumped to just 1% below WestRock's offered price per share of $18. The question now becomes whether WestRock looks more interesting following this merger. WestRock CEO Steve Voorhees said in today's announcement: "Overall, this is a highly strategic transaction consistent with our balanced capital allocation strategy that we expect will generate compelling growth and returns. We have the right team in place with deep integration experience to fully realize this opportunity."