Proactive Investors - DS Smith shares jumped 12% after it revealed it had received a "highly preliminary expression of interest" from packaging industry peer Mondi PLC (LON:MNDI) about a possible merger, which would create company worth more than £10 billion.
"The board of DS Smith understands that Mondi is considering a possible offer for DS Smith although no proposal has been received at this stage," DS Smith said.
DS Smith (LON:SMDS) was responding to press speculation about a link-up between the two and issued a put-up-or-shut-up deadline for Mondi under UK takeover rules of March 7.
Mondi has yet to give its take on the statement from DS Smith.
Shares in DS Smith rose 12% giving a market value of around £4.3 billion, while shares in Mondi fell 2.5% giving a market value of around £6 billion.
The possible bid comes hot on the heels of the £2.5 billion deal in the housebuilding sector between Redrow (LON:RDW) and Barratt Developments (LON:BDEV), announced on Wednesday, adding to a belief that more M&A activity is likely in 2024.