Mystery bidder eyes Smurfit

ANGLO AMERICAN, the South African mining group, is seen as a frontrunner to snap up packaging group Jefferson Smurfit, which has revealed it is in takeover talks with an unnamed bidder.

US companies International Paper and Weyerhauser could also be serious candidates to buy Smurfit, which would have a price tag of more than £2bn, making any deal Ireland's biggest takeover. Svenska Cellulosa of Sweden, the number two in container-board in Europe after Smurfit, said it was not the mystery bidder.

Dublin-based Smurfit, the world's biggest maker of cardboard boxes, said it had received an approach from a third party. 'Discussions are at a preliminary stage and may or may not lead to an offer being made for part or all of the company,' it said in a statement.

The shares soared 29 1/2p to 196p, valuing the firm at more than £2.2bn. Smurfit was forced into the statement after a run-up in the shares over the past few days on takeover speculation. It said that a holder of 1% of the shares 'may have disclosure obligations' under Irish takeover rules, suggesting the identity of the bidder could soon be revealed. Anglo American spokeswoman Kate Aindow said: 'We don't comment on market speculation,' but added that forest products was 'very much an area we're looking to expand and consolidate in Europe'.

Anglo's forest products arm Mondi has been aggressively acquisitive in recent years. Anglo is cash-rich and eager to diversify further outside South Africa. With 115 plants across Europe Mondi made operating profits of $522m (£356m) last year and is currently engaged in a joint e300m (£186m) bid for French packaging group La Rochette. Separately, Anglo said it was to buy ExxonMobil's Chilean copper interests for $1.3bn (£930m) in cash, in a move to strengthen its base metals business.

Credit Suisse First Boston analyst Lars Kjellberg said Smurfit had looked vulnerable. 'They have been underperforming the rest of the paper sector for quite a while,' he said.

Any bidder could help finance the deal by selling Smurfit's stake in US associate Smurfit-Stone Container Corporation, perhaps raising as much as e1.3bn, Kjellberg added. SSCC has been seen as a potential bidder in a reverse deal of some kind but such hopes had faded in recent months.

A deal could provide a convenient exit for Michael Smurfit, whose family owns about 10% of the business. Now a Monaco-based tax exile, he is due to hand over the chief executive post later this year, while remaining chairman. Smurfit has come under fire recently after pre-tax profits for the year to December sagged 26% to e325m on sales of e4.5bn, down 1%.