Smurfit directors say yes to bid
By By Bill Crist, Staff Writer
The board of directors at Jefferson Smurfit Group, the world's largest maker of paper-based packaging, recommended that shareholders approve a bid from Madison Dearborn Partners on Monday. Jefferson Smurfit Group has a 29.3 percent stake in U.S. paperboard and packaging manufacturer Smurfit-Stone Container Corporation. Smurfit-Stone Container Corporation, with 300 facilities worldwide and approximately 38,500 employees, owns and operates a plant in Brewton.
The Brewton mill, with approximately 650 employees, produces various types of paperboard products including SBS (solid bleached sulfate), kraft liner, white top liner, corrugating medium and kraft paper for bag end uses, according to the company's website.
"We are two different companies," said Gary Miller, general manager at the Brewton mill. "Jefferson Smurfit Group is a shareholder of our company and they are represented on our board of directors, but they are not involved in the day-to-day operation of Smurfit Stone. Since we are different companies, the sale won't have an impact on our local people or mill."
Patrick J. Moore, president and chief executive officer of Smurfit-Stone, which is headquartered in Chicago, Ill., said that he did not expect the sale to cause changes in the company's operations.
"A distribution of the Group stake in SSCC would not alter our operating strategy," he said. "We remain committed to building the premier paperboard and packaging business in North America. We have developed a business model that emphasizes delivering higher value for customers and profitability through the cycle. We are an independent company with our own balance sheet and remain committed to achieving our financial targets."
Jefferson Smurfit Group is headquartered in Ireland. Another U.S. firm, Texas Pacific Group, may put in a rival bid. According to the Wall Street Journal, Texas Pacific is in the early stages of gathering information about Smurfit. Under Irish takeover rules, directors are obligated to consider any offer they receive, even after endorsing an earlier one. Some analysts and shareholders have said that they thought there was room for a higher bid, even though the Madison Dearborn offer was in line with expectations.
The Madison Dearborn bid is for $3.5 billion in cash. The takeover must be approved by regulatory agencies in Ireland, the United States and Britain.