THE next major acquisition by Jefferson Smurfit Group is likely to be carried out through Smurfit's US associate, JS Corp. The deal could involve some means for Morgan Stanley to reduce its 36 per cent stake in JS Corp, according to the American in vestment house Bankers Trust.

There has been consistent speculation that Smurfit, which already owns over 46 per cent of JS Corp, will buy out the Morgan Stanley holding.

Commenting on Smurfit's $1.4 billion (£937 million) cash stockpile, Bankers Trust analyst Mr Mark Wilde said: "We believe that the right opportunity might include a move to purchase some or all of the Morgan Stanley's 36 per cent stake in JSC. It is, however, a complicated situation."

"The arguments for such a move include Morgan Stanley Leveraged Fund's unwillingness to sell at current levels as well as Jefferson Smurfit Group's reluctance to raise its stake above 50 per cent and consolidate JSC's nearly $2 billion in debt on its balance sheet. Following the 1995 Yankee Bond issue, we think Jefferson Smurfit Group is reluctant to place its credit rating at risk."

In its first analysis of Smurfit, Bankers Trust gives the Irish packaging group a buy" recommendation and sets a 12 month target for Smurfit ADR's of $36 or 225p for the Smurfit ordinary shares listed in Dublin.

Smurfit is currently trading at 174p and the Bankers Trust expectations for the share price are significantly higher than those of Irish analysts, most of whom have less ambitious targets for the group.

Bankers Trust, however, makes no bones about its views on Smurfit, stating: "Although we think it remains a bit early call to a fundamental turn in the containerboard market, we think investors will do well by starting to accumulate this stock in front of an industry turnaround," adding: "We don't expect this stock to get much cheaper."