IAWS float in doubt as it pulls out of €64m SWS deal

The €64 million deal that was a central part of IAWS Co-op's plans to float on the Dublin market has run aground.

The Co-op announced yesterday that it has withdrawn its offer to buy a significant part of the Cork-based forestry, renewable energy and services business SWS.

The purchase, valued at €64 million, was a key part of IAWS Co-op's plans to relaunch itself as a publicly-quoted company early next year, but the co-op indicated yesterday that it was continuing to pursue this strategy.

In a statement, IAWS Co-op made it clear that some SWS shareholders no longer favoured the deal. Five co-ops, including IAWS shareholders, Lisavaird, Dairygold and Drinagh, own SWS. The other two are Bandon and Barryroe.

"It has now come to our attention that some shareholders in SWS have reversed their previous support for the transaction and, in light of this development, IAWS Co-op has withdrawn its offer as it believes that the climate is not suitable for the successful conclusion and integration of the acquisition," the statement said.

Chairman, Denis Buckley, added that IAWS Co-op was disappointed at the failure of the deal. It had been negotiating it for 18 months.

As part of the build up to its flotation, the co-op has been assembling a portfolio of businesses. These include a 26 per cent of toll roads and utility business, NTR, a controlling interest in recycling firm TechRec Ireland and the Irish Pride Bakery.

It assets are worth around €230 million. The group is in the process of transferring these to a new company, One51, the entity that will eventually be floated.

Mr Buckley said that it was working on a number of additional opportunities in waste management and energy.

Recently, industry sources speculated that it was in talks with waste management and disposal company, Oxygen, with a view to taking over that business.

This speculation tied in with its stated strategy of focusing on the waste and alternative energy sectors. Its former chairman, Philip Lynch, recently said that "everything" in the waste sector was for sale.

Two weeks ago, IAWS Co-op distributed the 11 million shares it held in IAWS plc to its own shareholders. Those benefiting from the €120 million-plus windfall included Glanbia plc, Kerry Group, and the UK-based Co-op Wholesale Stores .