Jefferson Smurfit shareholders have overwhelmingly backed Madison Dearborn's $3.7 billion (€3.8 billion) takeover bid, clearing the way for the world's largest paper packaging maker to be taken private.

Unveiling what are likely to be its last set of accounts as a publicly quoted company, Smurfit said yesterday that 83.2 per cent of shareholders had approved the bid by the first deadline on Tuesday.

This is above the 80 per cent threshold needed for the offer to become unconditional.

But analysts said it was likely to be September before shareholders received their cash as the deal must clear a number of regulatory and legal hurdles before it can be completed.

Smurfit must seek approval from the Irish High Court for the spin-off of its 29 per cent associate, Smurfit Stone Container Corporation (SSCC), and the capital reduction that will ensue.

The company said yesterday it would apply shortly to the High Court for a hearing.

Although the bid has received approval from the authorities in the US and the Republic, Smurfit is waiting on regulatory clearance from a handful of countries in which it operates, including authorities in Austria and Mexico.

But these issues are seen as formalities, with the High Court approval likely to be "the last major step" in the process, one source close to the offer said.

Analysts said final payment would take place two weeks after all requirements were met.

Given that Madison Dearborn has extended its offer until August 20th, and assuming the regulatory approvals come through and a court date is set for late August, the earliest shareholders can expect a payout is early September.

Smurfit shares rose by seven cents to €3.03 yesterday as the market expressed its confidence that the deal would now go ahead. This is in line with the theoretical value of the Madison Dearborn offer.

The Chicago-based private equity firm has offered €2.15 per share in cash for Smurfit's core business while shareholders will get one SSCC share for every 16 group shares held.

Smurfit, the sixth-largest company listed on the Irish Stock Exchange, also issued second-quarter figures, which are likely to be the last before it departs the market.

The paper packaging group posted pre-tax profits before exceptional items of €86 million compared to €98 million in the same quarter last year, ahead of some analysts' forecasts.

Earnings per share fell to 3.9 cents from 4.7 cents previously.

However, the company warned that an improving fundamental environment might not necessarily translate into a better performance in the current year.

A larger-than-expected increase in waste fibre costs, a key input cost, has not yet been fully reflected in higher product prices while the weakening dollar has potentially negative implications for European and Latin American demand growth, Smurfit said.

Second-quarter net sales in Europe rose by 19 per cent to €912 million but operating profits fell by 6 per cent to €67 million.

In Latin America, sales fell by 5 per cent to €212 million while operating profits declined by 19 per cent to €26 million, reflecting the shutdown of a boxboard machine for maintenance in Mexico.