Smurfit board can feel justified in sticking to its guns

The bottom, as it turned out, didn't fall out of Smurfit Kappa's share price when its unwanted suitor, Memphis-based International Paper (IP), finally got the message and retreated in June.

Shares in Smurfit Kappa are currently trading almost a third above where they were changing hands in early March, before the company revealed it had received an unsolicited approach that was roundly rejected by the board as "highly opportunistic" and failing to reflect its "intrinsic" worth.

The board can feel justified in sticking to its guns against what chief executive Tony Smurfit, grandson of the group's founder, described on Friday as "tremendous pressure, given the increasingly short-term nature of markets".

Maybe the whole episode prompted shareholders to rethink Smurfit Kappa’s true value and focus on its medium-term strategy. Or perhaps some are holding out for another takeover approach. It’s difficult to really know.

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But it was strange to hear Smurfit, rightly, rail in a speech on Friday against the kind of protectionist, populist politics saw his Venezuelan operations seized temporarily by Caracas authorities last month, while also question way the Government in Ireland didn’t offer the group any support when it was being circled by IP.

Smurfit added he and his colleagues were often asked, “especially in our European countries”, whether the Government was “going to help” Smurfit as it fought off IP. This, of course, against the backdrop of growing protectionism internationally where we’ve seen proposals in France and Germany in recent months to protect strategically-important companies from unwanted takeovers.

"Of course governments have no place in takeover activity," said the Monaco resident, "But I was a little surprised by the fact that Smurfit Kappa and its predecessor, Jefferson Smurfit Group, have been a significant economic and social contributor over decades that we had no message at all of any support from any direction."

Curious words indeed from the head of Ireland’s first real beneficiary from globalisation.