CURRENT ACCOUNTS: Are we getting close to the stage where Jefferson Smurfit will soon make up its mind what to do with its 33 per cent stake in its US associate Smurfit Stone (SSCC)? Judging by Gary McGann's comments at NCB's recent annual investors conference, we may be edging close to a denouement - the only question being how Smurfit and Smurfit-Stone sort out their corporate links.

"We accept that the current structure of the group is a factor in the undervalued nature of our shares. We're totally open-minded on the options but we don't believe we've forever to address this issue since Smurfit Stone shares are underperforming the peer group," he said, adding that resolving the situation is now a priority.

Quite simply, there are only two possible solutions: either Smurfit and Smurfit-Stone can merge or Smurfit can sell its 33 per cent stake in the American associate. The status quo where uncertainty over the corporate relationship has hit both companies' share price is no longer tenable.

That said, Smurfit shares have been one of the Irish market's best performer this year - up 17 per cent since January in anticipation of some move to sort out the situation. In the same period Smurfit Stone shares are up just 6 per cent, suggesting that the market believes that it's more important for Smurfit than Smurfit Stone to bring the unsatisfactory corporate relationship to an end.

There are different views in the market on what Smurfit will do. Many believe that Michael Smurfit, in particular, would be personally very reluctant to divest its 33 per cent stake in Smurfit Stone after the company spent the best part of 20 years building up a sizeable presence in the US packaging market.

Smurfit's 30 per cent stake in Smurfit Stone is currently worth some €1.2 billion (€1.4 billion) and selling a stake of that size will not be an easy proposition. A trade buyer - International Paper has been mentioned regularly in this regard - would undoubtedly strike a hard bargain while an institutional placing of the stake would certainly test the market's confidence in a stock that is in a sector that is a bellwether for the state of the US economy.

If fund managers believe that the US economy is now on the upward part of a V-shaped rebound then buying into a cyclical stock like Smurfit Stone might seem a good bet. If they believe that the rebound in the US economy is less certain, then they would only buy into Smurfit Stone at a much reduced price. Whether Smurfit would be happy with the price in that sort of situation is less certain.

But some analysts also believe that Smurfit Stone shareholders are becoming disenchanted with the concept of a transatlantic merger between the two groups even though a merger between the two groups (in reality a takeover by SSCC given the disparity in market valuations) would have a dramatic effect on SSCC's strained balance sheet.

There is a growing school of opinion that the business case for a global packaging group is becoming more difficult to defend. Many in the market believe that there is a stronger case to be made for Smurfit to leave Smurfit Stone behind, revolutionise its own balance sheet with the proceeds from the sale of the 30 per cent stake and then focus on developing its business in Europe and Asia. The proceeds from the sale of the Smurfit Stone stake will move Smurfit from net debt of €1.1 billion to a small net cash position and would leave the group in a strong position to make significant moves in Europe and Asia.

There are pluses and minuses to both options, and no doubt there will be plenty of agonising in Clonskeagh before a decision is made.

But with the annual general meeting coming up in May, many in the market believe that Smurfit will be keen to have some news to bring to shareholders.