Jefferson Smurfit, the Dublin-based paper and packaging group, could become the centre of a takeover battle after a last minute approach from David Bonderman, chairman of the low-cost carrier Ryanair and chief executive of the investment company Texas Pacific.
Bonderman's investment group has requested financial information from Jefferson Smurfit in the past four weeks but has not yet made a formal offer.
On Monday, Jefferson Smurfit's independent directors recommended shareholders accept a €3.7billion leveraged buyout by the US venture capital group Madison Dearborn.
Mr Bonderman has had a series of investments in Ireland in the past, including Guinness Peat Aviation, now called AerFi Group, and Ryanair, in which he held a 19 per cent stake at one point.
Texas Pacific, a private equity house based in Fort Worth, Texas, has investments of more than £4.7 billion worldwide.
The leveraged buyout by Madison Dearborn, which has the full backing of the management and the Smurfit family, values the paper and packaging group at €3.7 billion. However, stock market analysts and fund managers have argued that the company is worth more than Madison Dearborn is bidding.
"I think there is more in the price," said Dan O'Donovan, managing director of Setanta Asset Management in Dublin.
Under the terms of the offer the paper and packaging group's executive chairman, Michael Smurfit, would retain his 7 per cent shareholding after he invests €80 million. He will also walk away with €160 million in shares and cash.
The senior management, which includes his brothers Alan and Dermot and his son Tony, would also retain their shareholdings and receive a mixture of cash and shares.
Michael Smurfit has said he would like to see his family continue its involvement in the company, which was started by his father, Jefferson.
Senior Smurfit management will end up with an estimated 20 per cent shareholding in the group if the deal meets with shareholder approval.
The Madison Dearborn offer is in two parts. The core group, Jefferson Smurfit, will be split from its key 29.3 per cent investment in its US-based packaging associate Smurfit Stone (SSCC).
Madison Dearborn is offering €2.15 in cash to Jefferson Smurfit shareholders. The group does not want to buy the SSCC stake, which is being separately distributed among the same Jefferson Smurfit shareholders on the basis of one SSCC share for every 16 Jefferson Smurfit shares they own. This element is valued at €1.11, based on the average SSCC price.The combined value of the bid is €3.26 a share.