Updated version 3 - International Paper is negotiating with bidders for its packaging business in Europe, the Middle East, and Africa (EMEA).

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Reuters, October 15 - International Paper (IP.N) said on Thursday that after receiving an unsolicited approach, the company is in discussions with potential bidders regarding its packaging business in Europe, the Middle East and Africa, providing an alternative to its planned business spin-off.

The papermaking and packaging producer said the sales process is still at an early stage, and it is unclear if a deal can be reached. While assessing potential sale options, the company will continue to advance its plan to spin off the business.

International Paper shares rose about 8%.

Previously, the Financial Times quoted sources as saying that private equity firms Lone Star and Atlas Holdings were separately in acquisition talks for the business, which could be valued at less than $6 billion.

Atlas Holdings did not respond to Reuters’ request for comment, while Lone Star declined to comment.

In January, International Paper announced (link) plans to split the company into two publicly listed companies by spinning off its Europe, Middle East and Africa (EMEA) business, and the divested business unit is expected to be listed in both London and New York.

At the time, the company said the EMEA business would comprise the merger of the region's former DS Smith (acquired last year for $7.2 billion) and International Paper’s operations.

The company said on Thursday it could not guarantee the final timing or structure of the proposed EMEA business spin-off.

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International Paper holds about one-third of the North American corrugated packaging market and is currently facing sluggish demand due to weak consumer spending and real estate market slowdown.

In July, the company’s second-quarter sales missed (link) Wall Street expectations and, during a business restructuring, lowered the upper end of its annual profit forecast.

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