Jefferson Smurfit shareholders approve of takeover

Shareholders in multinational paper and packaging group Jefferson Smurfit have voted overwhelmingly in favour of a takeover by the United States company Madison Dearborn Partners.

The €3.7bn offer from the American group was approved by 83.2% of shareholders a move effectively wrapping up the arrangement according to figures announced today.

The deal had to be approved by at least 80% of shareholders to go ahead.

The bid from the Chicago-based investment house has now been formally extended until August 20 for the remaining shareholders to endorse the deal.

The takeover development coincided with second quarter results from Smurfit reporting an 18% drop in pre-tax profits ahead of exceptional times over the first half of 2002, to €146m, with earnings-per-share also down.

Sales moved up by just 1.28%, to €2.36bn.

The company said business conditions and sentiment had ‘‘clearly improved’’ at the end of the first quarter, but claimed that the weakening of the dollar had impacted on trading.

A statement added: ‘‘Two factors may now mean that the improving fundamental environment may not necessarily translate into superior performance within the current fiscal year.

‘‘These factors include a greater than anticipated increase in input costs, and a weakening dollar, with potentially negative implications for European and Latin American demand growth.’’

In the second quarter of the year, Smurfit said there had been a 12% drop in pre-tax profits to €86m while sales went up 10% to €1.28bn.

The company will not be paying a dividend as the Madison Dearborn offer is conditional on Smurfit not making further payouts.

But if the offer is not completed, the Smurfit board will pay the interim dividend as part of the full year dividend for 2002.