Texas Pacific to counter-bid on Smurfit?

As the deadline for rival offers approaches, Texas Pacific is still exploring the possibility of making a counter offer for Jefferson Smurfit.

Texas Pacific is looking at the possibility of trumping Madison Dearborn’s offer for Irish packaging company Jefferson Smurfit, according to a report on Reuters.

Last month, US private equity firm Madison Dearborn tabled a E3.7m offer for the firm, which was subsequently approved by the board of Smurfit and is currently being considered by shareholders. The closing date for the offer is 6 August.

The offer is still considered to be the most likely to succeed as it has the backing of Smurfit management. However reports suggest that Texas Pacific has now obtained sufficient company information to consider a rival offer for the firm, with one analyst saying there is a possibility that Texas Pacific might be able to trump the E3.7bn offer. The US private equity firm has so far declined to comment. 

The E3.26 per share offer is at a 38 per cent premium to the firm’s share price prior to the commencement of negotiations between the two firms in May. Chicago-based Madison Dearborn is looking to spend up to E750m on the acquisition with the remainder realised through debt. Management at Smurfit are being offered the chance to buy up to E75m of the equity.

Since the initial announcement in May, much of the speculation over who would be the successful bidder for Jefferson Smurfit has focused on the large US buyout firms. In addition to Texas Pacific and Madison Dearborn’s involvement, it was also suggested that Kohlberg Kravis Roberts was considering a bid for the firm. Following the initial announcement of the offer, Texas Pacific was also cited as a possible partner for Madison Dearborn.