DCC nets €45m on Fyffes share sale

DCC has taken advantage of the recent strength in Fyffes' share price to sell half its 10.4 per cent shareholding for €57.3 million (£45.1 million). The 17.9 million shares were placed with overseas institutions by Davy Stockbrokers and Goodbody Stockbrokers and the sale generated a profit of €45 million for DCC. It is understood the shares were sold to between six and eight London-based institutions, some of which are offshoots of US investment groups.

DCC has been a Fyffes shareholder for 20 years, before the fresh produce group ever floated on the stock market. Chief executive Mr Jim Flavin said: "There was always an intention to realise all or part of our holding and, with strong institutional demand, we have been approached regularly to sell.

"We decided to realise half our holding. This is good for us as we got a good price and it's good for Fyffes which have got some high-quality new shareholders. It's a winwin situation."

Mr Flavin would not comment on whether he would remain as a non-executive director of Fyffes. "That's another matter. I'd rather not comment at this stage."

Since its full-year results in mid-December and particularly since the group presented plans for its worldoffruit.com Internet portal for the world's fresh produce industry, Fyffes shares have doubled in value to €3.32 from €1.65. DCC's sale has done little to dent the new-found institutional interest in Fyffes whose shares rose from the €3.20 placing price to an all-time high at €3.50 yesterday.

Just like Independent News & Media whose shares have soared since the start of the year as a result of its Irish Internet investment, Fyffes is attracting the interest of investors in technology stocks.

The group's worldoffruit.com offshoot is still at its very early stages, and had considered raising about $20 million in venture capital ahead of a Nasdaq flotation. It is now thought Fyffes has gone cool on venture capital finance and is considering taking worldoffruit.com directly to the Nasdaq later this year.

At its current stock market valuation of €1.03 billion, Fyffes is now the biggest of the big fresh produce companies having displaced Dole from the number one position.

For DCC, the proceeds of the Fyffes shares leave the group in a very strong financial position. Analysts had forecast that before the sale DCC would have had about €20 million debt on its balance sheet at the end of its financial year in March. The €57 million from the Fyffes shares will push DCC into a net cash position of some €37 million and leave the group in an exceptionally strong position for future acquisitions.