Smurfit shareholders approve takeover bid

Related tags Smurfit Stock market Stock Jefferson smurfit

Irish packaging group Jefferson Smurfit is set for takeover by a US
private equity group following shareholder approval of the bid
earlier this week. The acquisition comes as the company announced a
decline in pre-tx profits for the second quarter of the year.

Shareholders in Irish packaging giant Jefferson Smurfit voted overwhelmingly on Wednesday to accept a $3.7 billion (€3.8bn) takeover bid, as the company unveiled what was almost certainly its last set of accounts as a listed firm.

Smurfit said 83.2 per cent of shareholders had voted in favour of the offer by US private equity house Madison Dearborn, leaving the deal with one last hurdle to clear.

The takeover, which had required 80 per cent shareholder approval, remains conditional until the spin-off of its US associate Smurfit-Stone receives legal clearance - a factor widely considered to be a mere technicality.

Smurfit said the offer had been extended until 20 August.

Earlier this year, Madison offered €2.15 per share in cash for Smurfit's core business. The remaining asset, a near 30 per cent stake in Smurfit-Stone, will be distributed to Smurfit shareholders on the basis of one SSCC share for every 16 group shares held.

Smurfit recommended the offer from Madison, which has other investments in the paper and packaging sector, having failed in its own attempts to boost its flagging share price.

Smurfit shares were up 1.35 per cent at €3.0 in early Dublin trade.

Last month, Smurfit said a potential rival bidder - widely reported as being private equity firm Texas Pacific - had withdrawn.

The group also reported that second quarter pre-tax profit before exceptional items dropped to €86 million from €98 million in the same quarter of last year, while earnings per share fell to 3.9 cents from 4.7 cents previously.

It said an increase in input costs and the weakening US dollar meant that an improving business environment in the industry "may not necessarily translate into superior performance within the current fiscal year"​.

Pre-exceptional, pre-tax profit for the first half came to €146 million, down from €180 million previously, with EPS down 23 per cent to 6.6 cents.

The results were in line with expectations.

Related topics Processing & Packaging

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