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M&A Deal Directory 2003 Back  
Deals in excess of €1000m
Madison Dearborn
Acquirer: MDCP Acquisitions
Target: Jefferson Smurfit Group plc
Acquirer advisor: Deutsche Bank, Merrion Corporate Finance
Target advisor: IBI Corporate Finance, UBS Warburg
Acquirer legal advisor: Arthur Cox
Target legal advisor: William Fry
Origin of target: Irish based
Origin of acquirer: US based
Date of announcement: 17/06/02
Date of completion: 03/09/02
Consideration: €3.7 billion

The landmark deal of the year was unquestionably the €3.7 billion leveraged buy-out of paper and packaging giant Jefferson Smurfit Group plc (JSG) led by Madison Dearborn Partners (MDP), the Chicago based private equity house. This exceptional and precedent setting deal was the biggest ever deal involving an Irish company surpassing recent mega-deals such as the ?3.6 billion acquisition of eircell by Vodafone and the €3 billion LBO of eircom in 2001.

The JSG take-private was also a highly complex and sophisticated transaction for a variety of reasons. First, the transaction did not simply involve a straightforward cash offer for JSG’s shares. It also incorporated the spin-off to shareholders of JSG’s equity interest in Smurfit-Stone Container Corporation, the US-based paper and packaging conglomerate, in exchange for the cancellation of a portion of JSG’s share capital.

Secondly, from a regulatory perspective, as well as being subject to the Irish and UK takeover rules, the transaction also fell within the ambit of the US tender offer rules. This multi-jurisdictional regulatory framework added an additional layer of complexity to the process.

Thirdly, managing the PR aspects of the deal was a continuous challenge given the high profile media attention that the deal attracted, particularly in Ireland.

Finally, from a capital markets perspective, international stock markets fell heavily during the offer period. Many proposed takeovers have been de-railed by unstable equity markets in the past.
However, notwithstanding the complexities of the deal outlined above, the transaction was executed in a very smooth and timely manner. A very high level of acceptances (over 83 per cent) were secured by the first closing date and shareholder approval of the spin-off was carried by a landslide majority at an EGM in August.

Profile by: Leo Casey, associate director at IBI Corporate Finance.

Merrion Corporate Finance acted as local advisor to MDCP Acquisitions 1, an affiliate of Madison Dearborn Partners LLC in connection with its $3.7 billion buyout of Jefferson Smurfit Group plc.
Merrion was engaged by Madison Dearborn Partners to provide advice and assistance in relation to Stock Exchange and Takeover Panel issues as well as assessing the local market sentiment for the offer. In this regard, Merrion provided input and advice on the institutions’ views of the terms and conditions of the offer as well as monitoring institutional and shareholder sentiment prior to and throughout the offer period.

Merrion also provided advice and inputs to Madison Dearborn Partners’ international advisor, Deutsche Bank, in relation to the completion of the offer.

Profile by: Pat Landy, managing director of Merrion Corporate Finance.

M&T Bank Corporation
Acquirer: M&T Bank Corporation
Target: Allfirst Financial Inc.
Divestor: Allied Irish Bank
Acquirer advisor: Lehman Brothers, Inc.
Target Advisor: AIB Corporate Finance
Acquirer legal advisor: Arnold & Porter
Target legal advisor: Wachtell, Lipton, Rosen and Katz
Origin of target: US
Origin of acquirer: US
Date of announcement: 26/09/02
Date of completion: Target quarter 1 2003
Consideration: $3.1 billion

AIB and M&T Bank are entering into a strategic partnership designed to create a major US regional bank in a €3.1 billion transaction. The merger of M&T and AIB’s subsidiary, Allfirst Financial, will create a strong mid-Atlantic banking franchise. The expanded franchise will be amongst the top twenty largest US banking companies with pro-forma combined assets of approximately e49 billion as of June 30, 2002.

As a result of the merger, AIB will acquire a strategic shareholding of 26.7 million M&T Shares, which, on the basis of M&T’s issued share capital at the date of the announcement, represents a stake of the order of 22.5 per cent in the enlarged M&T. AIB will also receive $886 million in cash.
M&T’s track record as a consistently best in class performer will be applied in developing Allfirst’s strong regional franchise in growth geographies.

Profile by: Ronan McGovern, associate director of AIB Corporate Finance.

Rodinheights Ltd
Acquirer: Rodinheights Ltd
Target: Green Property plc
Acquirer advisor: Merrill Lynch/Ernst & Young
Target advisor: IBI Corporate Finance/Dresdner Kleinwort Wasserstein
Acquirer legal advisor: William Fry/Clifford Chance
Target legal advisor: Arthur Cox
Origin of target: Irish based
Origin of acquirer: UK based
Date of announcement: 02/07/02
Date of completion: 23/09/02
Consideration: €1.1 billion

The next most significant transaction in the Irish market in 2002 was the €1.1 billion take-private of Green Property plc, which was led by the Chief Executive, Stephen Vernon.

Despite a solid track record of profitability and growth in net asset value over a number of years, Green consistently traded at a significant discount to both its UK peers and its underlying asset value. The company had, in the recent past, explored a number of alternatives in an attempt to maximise shareholder value. It was against this background that Vernon, through his bid vehicle, Rodinheights Limited, made his approach.

Following the initial announcement that Green had received an approach, a number of other parties expressed an interest in acquiring the company. A competitive bid process ensued which concluded in a recommended cash offer by Rodinheights for the company.

The offer price compared favourably with precedent transactions in the sector and was at a significant premium to the Green share price trading range prior to the announcement of any approach. Rodinheights received 76.7 per cent acceptances by the first closing date. The offer succeeded in allowing shareholders realise full value for their investment.

Profile by: Leo Casey.

The Rodinheights consortium included Stephen Vernon, the chief executive of Green Properties, Bank of Scotland, Merrill Lynch and ICC Holdings.

Other bidders for Green in the process were Treasury Holdings and Deutsche Bank Real Estate Private Equity.

Vernon’s reason for taking the company private was that the company’s true value was never really reflected in the share price. The offer price represented a 4.1p.c. discount to adjusted NAV at December 31 2001.

The closing price represented just a 1p.c. discount to the €9.80 per share being offered to green shareholders by Rodinheights. Ernst & Young provided due diligence services and tax structuring services to the consortium.

Profile by: Sinead Munnelly, senior manager in Ernst & Young Corporate Finance.

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