A major US markets advisory firm has recommended that Jefferson Smurfit Group shareholders vote in favour of resolutions that are key to the buy-out of the company.

The recommendation was announced by the group's independent directors in a statement issued in Dublin, London and New York.

The recommendation came from Institutional Shareholder Services (ISS), which has almost 1,000 institutional clients in the US and Europe, and provides analysis and vote recommendations to more than 20,000 shareholders each year.

ISS recommended that shareholders vote in favour of the spin-off and management participation resolutions, which are to be proposed at an extraordinary general meeting in Dublin on July 29th.

The purchase of the group by Chicago-based Madison Dearborn is conditional on the resolutions being passed.

Recommendations by ISS are considered to be particularly influential in the US, where 55 per cent of Jefferson Smurfit Group shareholders reside.

Madison Dearborn is a private equity company, which has valued Smurfit at €3.7 billion. Management at Smurfit has given an irrevocable undertaking to support the buy-out by the Chicago firm.

The group's current management team, including Dr Michael Smurfit, will stay on if the bid is accepted by shareholders.

Dr Smurfit is due to stand down as chief executive later this year. He is to earn a salary package worth about €16.5 million if the sale goes through.

The sale of his Smurfit shares will realise €159 million although he has agreed to reinvest €55 million in the privatised entity. In addition, he will get shares worth about €70 million in the part-owned affiliate, Smurfit Stone Container Corporation.