SAPPI's share price has risen sharply amid reports that the pulp and paper group might be the target of a takeover by Finland's UPM Kymmene.
Sappi's strategic development director, Robert Hope, said: "We have been irritated by these rumors." He declined to comment further, saying "the group does not comment on rumors".
Sappi has no shareholder holding more than 10% of its issued shares, and 52% of its shareholders are outside SA.
UPM is ranked within the top five paper and board manufacturers in the world, while Sappi is ranked as the largest coated fine paper producer. Combining the two groups would push UPM among the top three paper and board manufacturers.
One local analyst said in a report that the recent gains on Sappi's share price were largely due to rumors that UPM was seriously looking at acquisition targets, and at Sappi and Italian company Burgo in particular.
"We suggest that of the two companies, Sappi represents a better opportunity for UPM to meet its strategy of becoming a truly global forest products company."
The report said Burgo had extensive interests in Europe, where UPM Kymmene was already entrenched, while Sappi's interests were spread in what would become relatively new markets for UPM. Sappi's customer base is spread widely across the Americas, Europe, Africa and Asia.
UPM in recent months attempted to buy Champion International to diversify its customer base and currency stream. However, the report said Sappi clearly provided a better mechanism than Burgo in this respect.
Together the two groups would become the leading fine paper producer in Europe.
UPM operations are divided into three areas: UPM Printing Papers, UPM Converting and UPM Wood Products. Printing consists of magazine papers, newsprint and fine papers, and accounts for more than half the group's turnover of euro 8,3bn.
UPM Converting produces converting materials, and UPM Wood Products is a producer of timber and plywood. Other operations consist of chemical pulp, forest and energy and logistics and real estate units.
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