The board of Jefferson Smurfit Group met last night to discuss the leveraged buy-out proposed by the Chicago private equity firm, Madison Dearborn.

There was no comment from the group as directors gathered at its headquarters in Clonskeagh, Dublin. The meeting is believed to have begun around 6 p.m. It was thought to be the first formal board discussion of the approach since it made a stock exchange statement last Thursday.

The outcome was not immediately clear last night, but it is thought the board would be asked to appoint a sub-committee of independent directors to consider the approach and make a recommendation to shareholders.

The firm's chairman and outgoing chief executive, Dr Michael Smurfit, and members of his family are expected to join the Madison Dearborn bid in their capacity as members of the group's management rather than as major shareholders. It is thought the group's chief executive designate, Mr Gary McGann, will also take part if the bid goes ahead.

The evaluation process could take up to four weeks and Dr Smurfit and other management figures are not expected to participate because they would be perceived to have a conflict of interest. Madison Dearborn is thought to have indicated it is interested in a friendly bid only and the participation of group management would enhance the bid's prospects.

With the Dublin exchange closed yesterday for the bank holiday, Jefferson Smurfit shares rose marginally on the US market. Last night in New York, the stock was trading 0.76 per cent stronger at $29.27 per American Depository Receipt, the equivalent of 10 Smurfit shares.