Australia's Orora: Initial exuberance wanes as higher N.America exposure worries analysts

Nippon Paper Industries

11/10/2019 02:44

** Orora Ltd  ORA.AX  drops 3.1%, a day after investors
jumped in on the packaging maker's plans to sell its local fibre
materials business 
    ** The sale to Japan's Nippon Paper Industries  3863.T  for
A$1.72 billion ($1.16 billion) sent shares soaring on Thursday,
with co stock closing 13.9% higher  urn:newsml:reuters.com:*:nL3N26U4FD
    ** Morgan Stanley says sale increases ORA's exposure to
North American earnings risk - will make up ~40% of operating
profit from 32%
    ** Shares see worst intraday pct loss in nearly 8 weeks,
after falling as much as 4.2% to A$2.98 in session
    ** North America a "key concern", market to be focused on
trading conditions there - MS 
    ** Jefferies initiates with "buy" and PT of A$3.5; but says
long-term impact to shareholder value complex, though appealing
in short term
    ** Orora plans to return about A$1.20 bln of net cash
proceeds to shareholders, and also flagged some job cuts going
forward
    ** Orora's investments in North America yet to fully
demonstrate that they can ultimately underwrite sustainable and 
attractive organic growth from the local assets - Jefferies

($1 = 1.4784 Australian dollars)

 (Reporting by Nikhil Kurian Nainan in Bengaluru)
 ((NikhilKurian.Nainan@thomsonreuters.com; Twitter:
@NikhilKurianN))