Heard on the Street: West Coast Paper soars on buzz International Paper may buy the firm

Shares of SK Bangur-controlled West Coast Paper ended 7.2 per cent higher at Rs 70.15 on Monday following a late spurt on higher-than average volumes amid speculation that US-based International Paper (IP) is in advanced talks to buy out the company.

Bankers close to the deal said West Coast Paper is demanding a valuation of nine to ten times the current market price from IP, which last year acquired Andhra Paper Mills for about $425 million (about Rs 1,900 crore then). IP in 2011 paid a 205 per cent premium for the promoters' stake in AP Paper.

The steep valuations in the previous deal has sparked speculation that IP would pay a premium in this deal too. A section of the market feels IP is unlikely to pay such a sharp premium.