Chicago-based Madison Dearborn Partners at press time agreed to purchase Irish packaging giant Jefferson Smurfit Group PLC, after a much-hyped negotiation process. The deal is valued at EURO2.4 billion ($2.27 billion) and if closed will be the largest transaction in Ireland’s corporate history.
According to the agreement, Jefferson Smurfit will shed its 29.3% stake in Smurfit Stone Container, an American subsidiary, which has long been an albatross for Jefferson Smurfit’s stock. The deal, though criticized by some as undervaluing the company, will give investors EURO2.15 in cash per share of Jefferson Smurfit, plus a prorated portion of the Smurfit Stone ownership, representing a 38% premium over Jefferson Smurfit’s stock price prior to the publicized negotiations.
Through mixed reports, a number of other buyout firms have been named as interested parties, either entering their own bids or approaching Madison Dearborn with a partnership offer. Most of the speculation currently points to movement from Texas Pacific Group and The Blackstone Group.