Source: Sharecast
Under the terms of the proposal, DS Smith shareholders would receive 0.1285 shares in International Paper for each of theirs, meaning they would own around 33.8% of the combined entity.
Based on International Paper's share price of $40.85 at the close on Monday, this represents 415p and a premium of 45% to the closing DS Smith share price on 7 February, which was the last day before the start of the offer period with Mondi.
"The board acknowledges the strategic merits and potential for value creation through a combination with International Paper," DS Smith said.
"Accordingly, the board is progressing its discussions with International Paper regarding the proposal."
It added that there can be certainty as to whether any offer will be made nor the terms of any such offer.
International Paper has until 23 April to either announce a firm intention to make an offer or walk away.
DS Smith announced earlier this month that it had agreed to be bought by larger rival Mondi. The offer price has an implied value of 373p per share.
Shares in International Paper slumped on the news and by 1750 GMT were trading down 5% at $38.64.