Shares of paper firms on Wednesday surged by up to 20% on BSE, spurred by investor activity in the wake of buyout deals between US-based International Paper and Andhra Pradesh Paper Mills.
Andhra Pradesh Paper Mills led the gains among paper mills, surging by the 20% to touch its upper limit to R236.15 on BSE.
JK Paper was up by 19.96% to R57.70 and West Coast Paper Mills closed 17.11% higher at R90 a piece. Ballarpur Industries accelerated by 16.38% to R37.65 and Tamil Nadu Newsprint & Papers jumped 9.44% at R133.95 on BSE.
“The surge in paper stocks are mainly attributed to sentimental buying in the wake of acquisition of AP Paper Mills by US-based International Paper,” said Rajesh Jain, Religare Securities executive vice-president and head of retail research.
On Tuesday, International Paper signed agreement with the Kolkata-based L N Bangur Group to buy a 53.5% stake in AP Paper Mills for about $257 million.
International Paper will also launch a mandatory public tender offer to acquire additional, up to 21.5%, of the outstanding shares of AP Paper Mills for approximately $104 million in cash. The broader market index Sensex closed 169.38 points higher at 19,290.18 level.