Gallaghers offer £55m to complete Abbey ownership

Thu, Aug 2, 2012, 01:00

THE GALLAGHER family is offering £55 million (€69.7 million) to buy the outstanding shares in house builder Abbey plc that it does not own.

Gallagher Holdings, whose director include Abbey chairman Charles Gallagher and his brother and board colleague David Gallagher, yesterday offered £5.30 a share for the 48.4 per cent of the company it does not own.

The offer values Abbey at £114.1 million in total, and places a price tag of just over £55 million on the 48.4 per cent that the Gallaghers are seeking to buy.

The offer is unconditional and mandatory, and was triggered by the fact that Gallagher Holdings yesterday increased its stake in the company to 51.6 per cent from 47.2 per cent.

Irish Stock Exchange takeover rules oblige it to bid for the outstanding shares at the highest price paid by Gallagher Holdings for Abbey shares over the last 12 months.

In response, the Abbey board advised shareholders not to take any action. In a statement, the board said that the independent directors, other than either Charles or David Gallagher, would consider the offer and “provide further advice to shareholders in due course”.

The offer represents a premium of 13.2 per cent on Abbey’s closing price of £4.68 on July 31st and a premium 12 per cent to the company’s average daily closing price over the 30 previous to yesterday.

Stockbroking firm NCB is acting for Gallagher Holdings and Davy is advising the company.

Publicly-quoted Abbey specialises in housebuilding and has operations in the Republic, where it has sites in Wicklow and Laois, the south of England and the Czech Republic.

The group sold 310 houses last year, 255 in England, 37 in Ireland and 18 in the Czech Republic. The sales generated a turnover of €57.8 million and an operating profit of €8.3 million.

Last month, Abbey reported that profits before tax in the 12 months ended April 30th last – its last financial year – rose to €12.1 million from €11.5 million in 2011.

Operating profits dipped 3 per cent to €9.1 million from €9.4 million. Its results included a €1.3 million reduction in the value of property and work in progress in its Irish division, a result of difficulties in the market here.

Charles Gallagher acknowledged conditions were difficult in all the group’s markets. He said that as well as selling homes in the Republic, it has also begun renting properties. He pointed out that its English business, whose operations are based mainly in the south of the country, was benefiting from some spillover from the London property market.