Ire-Tex buy-out talks near conclusion

Discussions on a possible buy-out of the packing group Ire-Tex may be concluded in the next month, its managing director said yesterday.

As the group reported poorer trading in the first half of the year, Mr Paul McLaughlin said a due diligence process had started after two approaches - one from a group led by himself - were received. Discussions were continuing, he said.

The group did not specify the impact of the downturn on its sales in the January-June period. Its poorer performance is seen as further evidence of weakness in the IT sector, IreTex's core market, which has seen jobs cut by some of the State's largest employers.

Mr McLaughlin has proposed a management buy-out of the group formerly known as ILP. He and his backers control about 9 per cent of the company. He is supported by its finance director, Mr Kevin Hogan.

A rival approach has been made by Mr Paul Burke, the group's former chairman, who holds 29.9 per cent of Ire-Tex's stock.

Mr Burke owns 75 per cent of Nobleford Investments, which approached the group in January.

It is believed both bids are worth about 50 cents (39 pence) a share, valuing Ire-Tex at about €17.2 million (£13.5 million). Shares in the group closed at 37 pence yesterday, unchanged from Friday's close. Mr Burke's refusal to back two resolutions at yesterday's a.g.m. led to their withdrawal. The resolutions would have empowered the group to purchase up to 10 per cent of its own shares and reissue them off-market.

The group said: "The approach process has been demanding on management time and resources which, combined with some recent weakness in the market generally, has adversely affected the group's trading in the first half of the current year."

Mr McLaughlin declined to comment on the likely impact this would have on profits.

He anticipated a recovery in demand from Ire-Tex's core customers - such as Dell, Intel and Gateway - and hoped the group would increase revenues this year from €31.3 million in 2000.

Ire-Tex employs 420 people at plants in Kildare, Limerick, Galway and in Northern Ireland. It has suspended recruitment but says there will be no redundancies.

A final dividend of 1.8 cents per share was approved at yesterday's annual meeting.