International Paper (NYSE: IP) appears set to spark a bidding war for British rival DS Smith (LSE: SMDS), attempting to disrupt a planned deal between the target and London's (LSE: MNDI). Investors appear concerned IP might have to pay up, sending shares of the paper and packaging giant down 7% as of 3 p.m. ET.

The paper and packaging industry is readjusting capacity and expectations now that a post-pandemic shipping surge is over -- and that means consolidation. Last year, Irish company Smurfit Kappa Group agreed to acquire WestRock for $11.2 billion, and earlier this month, Mondi made a $6.58 billion (or 373 pence per share) offer to acquire DS Smith.

Now, apparently, IP wants in on the act. DS Smith said it's in talks with International Paper about a potential counteroffer that would reportedly value the target at between 400 pence and 420 pence per share.

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Source Fool.com