IIU sells remaining stake in Barlo for just over €3.8m

IIU Nominees, the investment company owned by investor Mr Desmond, confirmed today it has sold its remaining stake in radiator and plastics company Barlo for just over €3.8 million.

In a statement to the stock exchange IIU said it had sold its remaining shares at 48 cents. Just under eight million shares were sold.

Earlier today Barlo shareholders criticised the make-up of the company's board and its willingness to accept an offer which investors in the firm believe is below its true market value.

At the start of a sparsely attended extraordinary general meeting in Dublin's Shelbourne Hotel, chairman Mr Niall Carroll joked they had booked a bigger room before Mr Sean Quinn "reduced the number of our shareholders significantly".

Yesterday, Sarcon, a Northern Ireland-registered subsidiary of the Quinn Group, revealed it was offering 48 cents a share in a €84 million bid for the company.

Prior to this announcement the Quinn Group increased its holding in plastics utility Barlo to 29.95 per cent after purchasing shares from IIU Nominees and Bottin Investments, companies owned by Mr Desmond.

Mr Quinn's offer is 20 per cent higher than a 40 cents per share offer from Barlo chief executive Mr Tony Mullin. His investment company, Melgan, made an initial offer of 30 cents per share in July, 2003, before raising its bid to 40 cents last month.

Today's egm had been called to discuss matters relating to the 40 cent Meglan offer, matters superseded by the Quinn bid, which led to the early adjournment of the egm.

Before the meeting ended a shareholder identifying himself as Mr Rice, and claiming to represent three shareholders, said he had doubts over the behaviour of the board.

He said the Barlo board consisted of Mr Mullin and his "subordinates".

"Now we are told Mr Carroll has been an independent director of the company since 1976." Mr Rice asked if Mr Carroll was exempt from the rule that "directors should quit after nine years. These observations apply equally to (independent director) Mr John Farrell," he said.

Rising to walk out of the meeting, Mr Rice added the "two of them should be greatly ashamed."

Another shareholder asked why Bank of Ireland, an investor in the company, was willing to sell at the 30 cents per share offer. He alleged that because the bank was backing Mr Mullin's offer with a loan, it would recoup in interest what it stood to lose on its investment in Barlo.

It was also suggested by shareholders that the company was worth "at least 60 cents (per share), [and] while Mr Mullin is getting it on the cheap, Mr Quinn is getting it on the nearly cheap."

This morning, Barlo shares were down two cents at 46 cents having touched highs of 50 cents yesterday following news of the Quinn bid.

Adjourning the meeting, Mr Carroll said details of the Quinn bid had to be made within 28 days but he expected them within a week.