IWP management begins MBO talks

Management at personal care group IWP has taken the first step towards bringing the company private by beginning buyout discussions with the board.

The management buyout (MBO) move is led by the firm's finance director and deputy chief executive, Mr Bernard Byrne. Mr Byrne, who has overseen a radical management restructuring at IWP since he took up the deputy chief executive role last year, was unavailable for comment.

If successful, the MBO bid will almost certainly herald the departure of IWP chief executive, Mr Joe Moran, who first became involved with the firm in 1980. Mr Moran, who is IWP's largest shareholder, forms part of the committee that has been established to consider the MBO approach.

He will be joined by the company's chairman, Mr Frank Plunkett Dillon, and non-executive director, Mr Paddy Dowling.

The committee will be advised by Goodbody Corporate Finance.

In a statement issued last night, the IWP board said recent moves in the company's share price had prompted it to make public the initial approach.

The stock posted a 16 per cent rise last Friday and has climbed 35 per cent over the past month in reasonably heavy volume.

"Discussions are at a preliminary stage and there can be no certainty that this approach will result in an offer for the company," the board said.

A further announcement is expected within the next three or four weeks.

IWP has long been touted as a potential MBO target and the latest move is unlikely to surprise the market, despite the absence of Mr Moran, who has been repeatedly linked with a possible bid from the buyout team.

Mr Moran, who is 67, owns about 16 per cent of the company, and his approval will thus be required before any MBO bid will be accepted.

Mr Moran is also the 51 per cent owner of Manor Park Homebuilders, which earlier this month spent a reported €45 million on acquiring the Abbeville estate in North Dublin from the Haughey family.

Bank of Ireland Asset Management is the next-largest IWP shareholder with some 9 per cent. Other substantial shareholders include Schroders and Aberdeen Asset Management. IWP has seen several years of difficult trading, and management has repeatedly expressed dissatisfaction at the company's low share price.

Last year, the firm suffered a record pre-tax loss of almost €83 milion after massive one-off charges and warned of more harsh trading to come.

Shares in IWP closed two cents higher at 31 cents last night.