The board of ICG has said it “continues to consider the terms of the acquisition [by management] fair and reasonable”, having considered recent letters from shareholders, who argue the offer undervalues the company. The move came hours before Pageant Investments said it had voted against the proposed sale.
In a regulatory announcement on Tuesday, the board said it had contacted some of the shareholders who had written letters outlining their unhappiness about the €1.2 billion valuation placed on the business.
It had also considered a statement on Monday by the bidding vehicle, Bluefin Bidco, that it would not increase its offer for the ferry operator in spite of investor criticisms.
“Accordingly, the independent board unanimously recommends that ICG shareholders vote in favour of the scheme and the resolutions to be proposed at the ... extraordinary general meeting on 28 August,” the board added.
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Nick Furlong’s Pageant, which owns about 2 per cent of the business, later said it has voted against the deal, saying the proposal is “an unreasonable discount to fair value” while also criticising the timing of the sale as well as the independent board.
“The Independent Board, management and the advisors have recently communicated that they have spent approximately three years seeking potential purchasers for ICG without securing an acceptable proposal,” it said. “However, the offer announcement states that the Independent Board considered, but decided against, initiating a formal process to test third-party interest. These two positions require greater explanation.”
The €1.2 billion management buyout offer is led by chief executive Eamonn Rothwell, who owns 21.7 per cent of the company, and senior executives David Ledwidge, Andrew Sheen and Declan Freeman, who hold a further 2 per cent of the stock between them.
The offer would see shareholders paid €8 per share, a 28 per cent premium to the closing price of ICG’s stock on July 24th, an hour and a half before the bid was announced. The shares were trading at €7.68 on Tuesday.
Last Friday, Oxy Capital, which owns 1.4 per cent of ICG, came out against the proposed sale to management, claiming the bid undervalued the ferry business by as much as 39 per cent.
Other shareholders, including Marathon Asset Management, which has a 4.1 per cent stake in ICG; 2.1 per cent shareholder Janus Henderson; and Pageant have also voiced their objections to the value of the deal.
ISS, an influential shareholder advisory firm, recommended that investors back the management bid for ICG.
The board rejected the arguments made by Oxy Capital in a letter of August 13th, saying it had mischaracterised the nature of the ICG business and was seeking to “apply valuation metrics which are not comparable or appropriate”.
“In particular, five of the nine cited precedents are port operators, not relevant to a ferry operator whose container and terminals division is only around 20 per cent of group Ebitda, and the four ferry operator deals average around nine years old, predating the current rate and operating environment.”
The board said no third party had approached the company with a firm proposal over a period of several years despite “engagement by ICG’s advisers with a significant number of financial sponsors, investment banks and infrastructure investors”. And none has come forward since the buyout proposal was announced in July.
The board said the publication of ICG’s interim results, originally slated for Thursday morning, had been brought forward to Wednesday afternoon to give shareholders extra time to digest them before the EGM on the sale of the business is held.
