The share price of Boxmore International, the Northern Ireland print and packaging group, has soared by 55.5p sterling to 210.5p, a 35.8 per cent increase, following confirmation that it may be taken over. Boxmore is now valued at £150 million sterling (€238 million).

The company in a brief two-sentence statement noted the recent rise in the share price, saying it "can confirm that it has received an approach which may or may not lead to an offer for the company".

A spokesman for the company would not elaborate. Some industry sources said the bidder was a US company, possibly Chesapeake Corp, but this could not be confirmed.

Chesapeake recently acquired Field, a British pharmaceutical packaging company, that would fit well with Boxmore's interests. This led to a rival US company, Shorewood Packaging, making a bid for Chesapeake which reacted with a counter bid. Chesapeake is now claiming a breach of fiduciary duty. Tyco has also been mentioned as a possible bidder for Boxmore.

Negotiations with the US company, however, are understood to be at an advanced stage. Due diligence is taking place and, if successfully concluded, an offer will be made for Boxmore which has been the subject of takeover speculation for some time. Last September it denied it was in takeover talks.

Boxmore's shares have been very weak, falling from a high of 343p in 1996 to a low of 123p this year, before recovering to 210.5p yesterday, following the announcement.

The bidder would have to receive agreement from the five largest institutional shareholders in Boxmore who control 27 per cent of the company. The two largest are Gartmore Investment Management with 7.5 per cent and AIB Investment Management with 5.9 per cent.

The directors own 6.2 per cent of the company. Mr Harold Ennis is the largest with three million shares, representing 4.2 per cent of the company, with a market value of £6.3 million. Mr Mark Ennis has 1.3 million shares with a market value of £2.7 million.

Print and packaging companies have been out of favour, as an investment, for some time. The low rating accorded to the sector was responsible for the privatisation of Clondalkin Group.

Rationalisation of the British print and packaging industry has been taking place but the process needs to go much further. Despite the difficulties in the industry, Boxmore has been quietly expanding through acquisitions. Its most recent takeover was the European pharmaceutical printed packing operations of British group Rexam for £13.2 million. These consist of three plants in Brussels, Eastleigh in Britain and in Limerick.

Boxmore has been expanding more into the pharmaceutical side where the margins are better. However, while its sales have been growing, pre-tax profit took a dip in 1998 and the projected profit for this year will still be below 1997's level.

Boxmore has been hit by the strength of sterling and rises in British interest rates which are hitting exports. These have been reflected in the company's recent results which showed a modest 3 per cent rise in pre-tax profit to £7.5 million in the six months to the end of June 1999.

Announcing the results last month, the chief executive, Mr Mark Ennis, said sterling's strength had been a significant factor.