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MarketScreener Homepage  >  Equities  >  Tokyo  >  Nippon Paint Holdings Co., Ltd.    4612   JP3749400002

NIPPON PAINT HOLDINGS CO., LTD.

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Australia's Orora to sell fibre arm for $1.2 billion, with big return for shareholders

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10/09/2019 | 10:46pm EST

(Reuters) - Australian packaging maker Orora Ltd said Thursday it will sell its local fibre materials business to Japan's Nippon Paper Industries for A$1.72 billion ($1.15 billion), simplifying its operations and sending its shares up 20%.

The deal is the latest in a crop of Japanese buyouts of Australian companies which includes Japan's Nippon Paint's takeover of the country's best known paint firm, DuluxGroup, for A$3.8 billion earlier this year.

The sale would be the third-largest Australian acquisition by a Japanese company this year, according to Refinitiv data.

Orora, which plans to return the bulk of the funds from the sale to shareholders, said it would focus on its higher growth Australasian glass and aluminium beverage and North American businesses.

"(The sale) fully values the fibre business and provides a streamlined opportunity for the Orora business going forward," Chief Executive Brian Lowe told a media call.

Shares of Orora surged as much as 20.2% and were set for their strongest one-day percentage gain since the stock's debut in 2013.

The deal highlighted renewed interest in businesses such as cardboard, which is now widely used by delivery services such as Amazon to transport product, and allowed Nippon to take advantage of a weak Australian dollar, said James McGlew, executive director of corporate stockbroking at Argonaut.

"With the Australian dollar at low levels at the moment, it means they're getting bigger bang for their yen out of acquisitions in Australia," McGlew said.

Australian Paper, a wholly owned unit of Nippon Paper, welcomed the sale.

"(The deal) will allow us to expand into new sectors such as box and carton manufacture along with paper bags and sacks ... bringing us closer to end markets," Peter Williams, chief operating officer of Australian Paper, said in a statement.

Orora said it expects a net gain of about A$225 million from the deal, which is set to close in early 2020, pending regulatory approval in Australia and New Zealand.

The sale will make net cash proceeds of about A$1.55 billion from an enterprise value of A$1.72 billion and Orora intends to return about A$1.20 billion of that to shareholders through capital management initiatives.

Orora also flagged some job cuts, saying there may be some reduction in roles going forward.

($1 = 1.4892 Australian dollars)

(Reporting by Ambar Warrick and Devika Syamnath in Bengaluru, editing by Richard Pullin)

By Devika Syamnath and Ambar Warrick

Stocks mentioned in the article
ChangeLast1st jan.
AUSTRALIAN DOLLAR / CANADIAN DOLLAR (AUD/CAD) 0.01% 0.89645 Delayed Quote.-1.24%
AUSTRALIAN DOLLAR / JAPANESE YEN (AUD/JPY) 0.01% 74.63 Delayed Quote.-1.58%
AUSTRALIAN DOLLAR / NEW ZEALAND DOLLAR (AUD/NZD) 0.07% 1.03265 Delayed Quote.-0.83%
AUSTRALIAN DOLLAR / SWISS FRANC (AUD/CHF) 0.08% 0.66224 Delayed Quote.-2.08%
AUSTRALIAN DOLLAR / US DOLLAR (AUD/USD) 0.05% 0.6828 Delayed Quote.-2.38%
BOOHOO GROUP PLC 1.03% 314.2 Delayed Quote.5.47%
BRITISH POUND / AUSTRALIAN DOLLAR (GBP/AUD) 0.00% 1.91542 Delayed Quote.1.35%
DULUXGROUP LIMITED 0.00%End-of-day quote.0.00%
EURO / AUSTRALIAN DOLLAR (EUR/AUD) 0.00% 1.61419 Delayed Quote.1.05%
LME ALUMINIUM CASH -1.44% 1781.5 End-of-day quote.0.54%
NIPPON PAINT HOLDINGS CO., LTD. 0.18% 5490 End-of-day quote.-0.90%
NIPPON PAPER INDUSTRIES CO., LTD. -0.43% 1835 End-of-day quote.0.05%
ORORA LIMITED 0.00% 3.19 End-of-day quote.0.31%
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Financials (JPY)
Sales 2019 699 B
EBIT 2019 89 088 M
Net income 2019 35 200 M
Debt 2019 192 B
Yield 2019 0,82%
P/E ratio 2019 40,0x
P/E ratio 2020 31,6x
EV / Sales2019 2,79x
EV / Sales2020 2,37x
Capitalization 1 761 B
Technical analysis trends NIPPON PAINT HOLDINGS CO.,
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 8
Average target price 5 218,75  JPY
Last Close Price 5 490,00  JPY
Spread / Highest target 22,0%
Spread / Average Target -4,94%
Spread / Lowest Target -40,8%
EPS Revisions
Managers
NameTitle
Tetsushi Tado President, CEO & Representative Director
Masaaki Tanaka Chairman
Yusaku Obata Executive Officer, GM-Research & Development
Manabu Minami Representative Director & GM-Administration
Seiichiro Shirata Director & Managing Executive Officer
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