Georgia-based packaging firm Rock-Tenn has cleared a legal hurdle in its effort to acquire Chicago-based paperboard packaging manufacturer Smurfit-Stone Container for $3.5bn, after a judge refused to block the deal.
Delaware Chancery Court Judge Donald Parsons said that Smurfit-Stone’s directors properly accepted Rock-Tenn’s offer, which includes $17 a share in cash.
On 27 May, the shareholders of Smurfit-Stone are expected to vote on the offer.
Smurfit-Stone’s investors have reportedly opposed the bid because Rock-Tenn’s offer does not provide enough money for the company’s shares.
Third Point, Royal Capital Management and Monarch Alternative Capital, which collectively own about 9% of Smurfit-Stone’s shares, have agreed to vote against the deal.
In early 2011, Rock-Tenn announced its plan to buy Smurfit-Stone for about $35 a share, half in cash and half in Rock-Tenn stock.
In 2009, Smurfit-Stone sought bankruptcy protection from creditors as a result of the economic decline in the US, and cleared $3bn in debt by giving shareholders 4.5% of the reorganised company.