A number of big shareholders in Irish Continental Group (ICG) are opposing the planned sale of the ferries operator to management, led by chief executive Eamonn Rothwell, arguing that the €1.2 billion deal announced late last month undervalues the business.
The investors, who include Marathon Asset Management which has a 4.1 per cent stake in ICG, 2.1 per cent shareholder Janus Henderson and Irish businessman Nick Furlong’s Pageant Investments, which holds about 2 per cent of the stock, are understood to have written to the company on Wednesday voicing their objections to the value of the deal, according to sources.
Equus Global, which has an almost 1.3 per cent interest in ICG and Oxy Capital, with a 1.4 per cent stake, are also known to be among the signatories. However, each is acting independently and the investors have stated they are not acting in concert. Together they own almost 11 per cent of the business.
The bid by Rothwell (71), who owns 21.7 per cent of the business, and other senior managers, who hold a further 2 per cent of the stock, comes 19 years after a previous failed attempt by the long-standing chief executive to lead a management buyout.
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The €8-a-share offer represented a 28.2 per cent premium to the closing price of ICG’s stock on July 24th, an hour and a half before the bid was announced.
ICG said in its announcement that it put an enterprise value – including debt and equity – of 9.8 times the group’s earnings before interest, tax, depreciation and amortisation (Ebitda) for 2025.
However, some minority shareholders highlighted that the Ebitda level was affected last year by some disruption on its principal route between Dublin and Holyhead – and argue that it does not reflect the full benefits of a capacity-sharing agreement with peer P&O on the Dover to Calais route.
They also say that ICG’s net debt of €256 million at the end of 2025 represented a peak level of borrowings, as it had just acquired its previously leased James Joyce ferry, the largest passenger cruise vessel operating on the Irish Sea, and prepared for a final payment two months ago on its Oscar Wilde, to give it full ownership of its ferry fleet.
It is estimated that ICG’s net debt was on track to fall rapidly from the end of 2025.
Some investors are also known to be disappointed that shareholders – other than members of the management buyout team – are not being given an opportunity to roll their equity into the bid vehicle.
Others are concerned that the extraordinary general meeting (EGM) to seek shareholder backing for the deal is set to take place on August 28th, a little over a month after the deal was first announced – with many investors likely to be unable to give the bid their full attention in the meantime as they are on vacation.
Dissent among minority shareholders in ICG echoes discontent among some shareholders in PTSB and DCC, which are also currently under offer.
PTSB secured backing from 91.3 per cent of shareholders last month for its takeover by Austria’s Bawag at an EGM.
Uncertainty remains nevertheless over whether a separate count of minority shareholders will be required to approve the deal after the Government’s 57.5 per cent stake drove the overall result.
Some 36 per cent of minority investors voted against the transaction at the EGM. The transaction is being carried out by way of a so-called scheme of arrangement which will ultimately need High Court approval.
A number of investors in DCC, including Fidelity International, DCC’s founder, Jim Flavin, and Aviva Investors, have signalled they will not support a £5.68 billion (€6.69 billion) bid made last month by US private equity firms KKR and Energy Capital Partners for that business.
