Smurfit brothers to make over £65 million from Powerflute sale
Finnish paper and packaging company to be sold for £268 million
Brothers Michael and Dermot Smurfit are to make £65.6 million (€77.2 million) from the sale of paper and packaging company Powerflute to Madison Dearborn Partners, a US private equity firm.
The London-listed Finnish company, which is 27.5 per cent owned by the brothers, agreed to the £268 million (€315.25 million) sale today. The Smurfits had previously agreed to accept 80 pence per share. Other shareholders are being offered 90 pencde per share in the deal, a 22 per cent premium on yesterday's 73.75 pence closing price.
Today's bid is the second such takeover offer by the Chicago-based firm in the past year. Late last year, they offered £261.5 million for the company.
With a holding company, Nordic Packaging and Container (Finland) Holdings, set up for the sale, Madison Dearborn has secured irrevocable undertakings from the owners of 51 per cent of Powerflute shares. Around 15 per cent of the company is owned by Dermot Smurfit, while Michael Smurfit owns just over 12 per cent.
In late 2004, Dermot Smurfit, who had served as deputy chairman of that firm, led a syndicate takeover bid for a semi-chemical paper mill from packaging multinational M-real, before rebranding it as Powerflute.
In March,Michael Smurfit slashed his stake in the company, raising around €25 million for 'estate planning' from the sale of around 36 million shares.
The company makes "coreboard" recycled paper as well as packaging papers used for transporting fruit and vegetables.
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