Irish investors have sharply criticised Jefferson Smurfit, the Dublin-based paperboard and packaging company, for its willingness to accept a €3.7 billion takeover bid from Madison Dearborn Partners, the US private equity firm.
Fund managers complain that the price they will get for each Smurfit share is too low. But across the Atlantic, where US investors hold 55 per cent of the company in ordinary shares as well as American Depositary Receipts, the Madison Dearborn offer has been well-received, according to Mark Kenny, an executive vice-president at Smurfit.
"The US institutions will take their own views based on real decisions that are not emotional," Kenny said.
"They're basically saying: 'This isn't a surprise. You delivered what you set out to deliver.' They're very realistic."
Smurfit executives are still planning to meet a rival bidder this week. But the Madison Dearborn offer is a 38 per cent premium to the price of Smurfit stock before news of the deal surfaced. And "in the range of fairness, [it's a] little on the low side, but it's in the range", said one US fund manager.
US investors' acceptance of the forest products sector, including its limitations, was what prompted Jefferson Smurfit to build aggressively its US presence in the first place.
Since 1995, when the group began trading ADRs on the New York Stock Exchange, it has lifted its US shareholder base from 7 per cent to 55 per cent of the total.
ADR investors - including Wellington Management Company, which runs a Vanguard fund; Barrow, Hanley Mewhinney & Strauss, a Texas firm; and Fidelity Investments - account for about a third of that group.
Kenny, who visited his largest US investors last week, is optimistic about gaining approval for the Madison Dearborn offer.He needs the support of 80 per cent of shareholders in order to close the deal.
The founding family and board members still hold a 10 per cent stake. UK and international funds hold 15 per cent, while Irish investors have less than 20 per cent.
There may be resistance from the latter group in part because chairman Michael Smurfit is "a high-profile guy in a small country and he's made a lot of money while long-term shareholders haven't", the US fund manager said.
But US investors had suffered less or made some money, he said.
"If it's cash today versus continuing to see the stock trade lower, our conclusion is that this is close enough."