Arnotts chairman rejects bid

Arnotts chairman Richard Nesbitt SC has said his control of a family investment vehicle that owns 60 per cent of the company empowers him to spurn a €50.57 per share bid from the O'Connor family, who have 24.7 per cent of the department store operator.

Mr Nesbitt rubbished the €200 million bid as a "stunt" and said in a letter to the O'Connors that he had no interest in selling his controlling stake. He owns 60 per cent of Art Ltd, a Nesbitt family investment company that owns 60.4 per cent of Arnotts, and says the company is structured in a way that means a majority vote within Art Ltd by him will command all of its votes in Arnotts.

"The status, board make-up and shareholding breakdown is not known to the bidders, but it doesn't in any way change the status of the offer," said a spokesman for the O'Connors, who want the bid assessed by other Nesbitt family members who have shares in the business.

Mr Nesbitt accused the O'Connors of having "total disregard" for the interests of the business by involving the media in its bid, which puts an enterprise value of €510 million when debts are included.

The bid came late on Friday, before a board meeting this morning at which Arnotts was to discuss entering a final negotiation with equity partners for its €750 million Northern Quarter development plan in the Henry Street area. The bid is backed by Bank of Scotland (Ireland), subject to due diligence.

Seen by The Irish Times, Mr Nesbitt's letter to former Arnotts plc chairman Michael O'Connor marks an escalation of the conflict between two families who have been involved together in Arnotts for more than 50 years. Mr Nesbitt, who offered to buy out the O'Connors at €25 per share or appoint an independent expert to carry out a valuation, says he is supported by other Nesbitt family shareholders. "Late on Friday afternoon, an 'indicative non-binding offer to acquire Arnotts Holdings Ltd' was delivered to the Companies' Offices and I believe later delivered to some of the Nesbitt family who hold Arnotts Holding Ltd shares.

"The indicative, non-binding and unfinanced offer was also sent to The Irish Times. I, in fact, learnt of it after contact by an Irish Timesjournalist who was able to read to me from the terms of the document. Whatever your intentions, negotiation through the media is most damaging to the company Arnotts Holding."

Led by Kevin O'Connor, son of Michael O'Connor and a partner in Arthur Cox solicitors, the rival family responded by saying Mr Nesbitt's offer was in itself damaging to the business as it seriously undervalues the business.

"What is particularly damaging to the company at this time is to ascribe a value to it of only €100-€130 million as Richard Nesbitt has," said an O'Connor spokesman. He dismissed the claim that the bid was a stunt. "The O'Connor offer is very attractive and an opportunity must be given to all shareholders to consider this."