Desmond moves in on Greencore with 5.3% shareholding

Financier Mr Dermot Desmond, who has previously invested heavily in public companies such as Golden Vale and Unidare, has now turned his attentions to food group Greencore where he has built up a shareholding of 5.3 per cent.

The price Mr Desmond paid for his 9.9 million shares has not been disclosed but since Green core has been trading around €3.00-3.15 recently, he probably paid at least €30 million (£23.5 million). Mr Desmond is now the fourth-biggest shareholder in Greencore, after Bank of Ireland Asset Management, Merrill Lynch and Putnam.

Mr Desmond's investment in Greencore will inevitably generate speculation on the future of the group, whose activities include sugar, flour, fertiliser and malt manufacturing as well as a consumer foods division which takes in baking and pizza toppings in the UK. The revelation that Mr Desmond has been a recent buyer did not, however, lift Greencore shares, which closed down 10 cents on €3.05. The shares have traded from a €4.20 to a €2.40 low over the past 12 months.

Market sources believe Mr Desmond's investment in Greencore is simply that, and that he is unlikely to try to make changes at that group as when he and fellow financier Mr Pierce Casey tried to block an acquisition at engineering group Unidare.

Sources say Mr Desmond may further increase his shareholding but is unlikely to look at the Greencore investment as anything other than a way to making a profit.

There have been periodic suggestions that merging Greencore with the other Irish foods group IAWS makes commercial sense as it would create one large Irish foods group with a stock market capitalisation of more than €1.1 billion. That would give it the scale to attract the interest of international investors.

Market sources believe Mr Desmond's investment in Greencore is similar to that he made in Golden Vale in recent years, where he bought a sizeable stake, sold it off at £4 million profit and then bought in again. He now holds an 8.3 per cent stake in Golden Vale as well as the 29 per cent of Unidare he owns jointly with Mr Casey.

While the investment in Greencore is sizeable even by Mr Desmond's standards, it is still a relatively small deal compared to his sale of shareholdings in Esat Digifone and Baltimore Technologies in the past year. In November, he sold about £55 million (€70 million) of Baltimore shares and retained a stake that is currently worth £61 million (£77 million). Earlier he sold a 9 per cent stake in Esat Digifone for $114 million (€113 million) to Esat Telecom and Telenor.

Mr Desmond also has other extensive business interests including a 10 per cent stake in Datalex which is due to come to the stock market next year, 19 per cent of Glasgow Celtic football club and London City Airport.