Smurfit on course for Ryder Cup in E115m K Club deal

Brian O’Mahony, Chief Business Correspondent

The announcement was made yesterday by paper and packaging group Jefferson Smurfit, which was led by Dr Smurfit until he sold the group to Madison Dearborn, a US equity investment group, in 2002.

The company says the E115m paid for the site will be used to cut debt.

The deal confirms weeks of speculation that Dr Smurfit was in negotiations with Madison Dearborn to buy back the club.

The purchase will give him control of the K Club in time for next year’s Ryder Cup which will be played on the new course, which opened recently.

Dr Smurfit has also purchased the site of the former Clonskeagh paper mill in South Dublin, the location of the original Smurfit plant set up by his father several decades ago when he came here from Britain after the Second World War.

Some were critical of the K Club venture, fearful that it would turn out to be a total disaster for the group. There was criticism that the cost of the project went way over budget.

Dr Smurfit never wavered in his belief in the project and the arrival of the Ryder Cup to the course next year is seen as a major endorsement of his judgment. In the past luminaries such as Tiger Woods have played the course.

Friends of Dr Smurfit, including financier Dermot Desmond, are frequent visitors to the club, which has attracted a lot of overseas interest since it was set up.

It has also emerged that the tycoon has been granted permission to build a magnificent mansion in the grounds of the golf course.

The new palatial mansion will overlook the first tee of the Co Kildare golf course and is due to be built in time for the big golf challenge between Europeans and Americans next year.

This will be a 26,000 sq ft showpiece of a residence, equivalent in size to 51 single-bed apartments or 26 three-bed semi-detached homes.

The Monaco-based Irishman got planning permission from Kildare Council a few years ago. He was lucky to get through the planning process, however, as the venture was turned down by the county engineer at the time, John Lynch. He was overruled by the county manager.

Friends of Dr Smurfit expected to enjoy his hospitality at his new home include golfing superstar Tiger Woods and fellow tax exiles JP McManus and Mr Desmond.

Yesterday’s transaction has been unanimously approved by the independent board members, having satisfied themselves that the transaction represented fair market value, and by Jefferson Smurfit Group (JSG)’s shareholders, including Madison Dearborn Partners.

JSG chief executive Gary McGann, in welcoming the sale, said: “The timely disposal of KHCC continues our established strategy of monetising non-core assets. This disposal provides further benefit to JSG in the form of reduced debt levels and lower debt servicing costs. It also continues our objective of further sharpening our strategic and operational focus.”