(Reuters) - International Paper ( IP ) said on Thursday it would seek a secondary London listing if it buys British paper and packaging peer DS Smith ( DITHF ) and the combination could deliver at least $514 million of pre-tax cost savings on an annual basis.

International Paper ( IP ) last month stirred up a potential bidding war over DS Smith ( DITHF ), making a takeover proposal that valued the UK firm at 5.72 billion pounds ($7.24 billion), or 415 pence per share.

The U.S.-listed paper company has yet to make a firm offer for DS Smith ( DITHF ). It, along with rival suitor Mondi ( MNODF ), have until April 23 to make a firm offer or walk away.

International Paper ( IP ) said "significant progress has been made" in due diligence, as it lays out detail on the possible combination, including a proposal to establish a European headquarters in London and a secondary share listing on the London stock exchange.

Shares in DS Smith ( DITHF ) were up 1.3% by 1121 GMT, and hit their highest level since October 2021 at 408.2 pence.

International Paper ( IP ) shares were down 1.2% premarket.

DS Smith ( DITHF ) had reached an in-principle agreement with its UK-listed rival Mondi ( MNODF ), which made an all-share takeover proposal valuing DS Smith ( DITHF ) at 5.14 billion pounds.

($1 = 0.7901 pounds)