Thursday 27 October 2016

Smurfits lose out as Powerflute halts talks with Madison Dearborn

Paul O'Donoghue

Published 21/12/2015 | 09:41

GENEROUS: Michael Smurfit
GENEROUS: Michael Smurfit

Finnish packaging firm Powerflute, which the wider Smurfit family owns over 36pc of, has halted takeover talks with Madison Dearborn, the US private equity giant that acquired Irish group Smurfit Kappa's predecessor in 2003.

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Earlier this month the packaging company, founded by Dermot Smurfit Snr who is the current chairman, said it had received the preliminary proposal and that it was being considered.

The proposal valued Powerflute, which is listed on the AIM market in London, at about £255m (€353m).

Dermot Smurfit owns 15.6pc of the company, while Michael Smurfit's Bacchantes investment vehicle owns 21.5pc.

Between them they would have stood to realise about £91m from the sale of the business. They would have been paid 79p per share with a 6p earn-out for their stakes

In a statement released this morning Powerflute said: “Following evaluation of the proposal by the independent members of the board of directors of Powerflute and consultations with certain major shareholders of Powerflute, the board of Powerflute has terminated discussions with Madison Dearborn.

The company said that the announcement had been made with the prior knowledge of Madison Dearborn.

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