There’s always a lot of noise around takeovers. Either the target companies are holding out for more or some of their investors think they should be.
Such is the case right now with three Irish listed companies – PTSB, Irish Continental and DCC Energy. Between them, they account for a significant portion of the very diminished Dublin stock exchange.
PTSB thinks it has got the offer from suitor Bawag across the line but may yet be forced by a court to ballot minority investors to confirm support for the deal.
Irish Continental’s directors admit an €8 a share €1.2 billion management offer for the ferries business could fall short at a meeting of shareholders on Friday in what would be an embarrassing second failure for long-time boss Eamonn Rothwell.
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And then we have DCC, where an array of investors have lined up against the £65.25 (€76.35) per share offer from two US private equity groups, claiming it significantly undervalues the business.
Even the sweetener of an additional payout of up to £1.25 a share if the sale of its tech division secures a certain price has failed to convince objectors, among whom Fidelity, Aviva, Ninety One and Marathon rank prominently.
Investment giant Fidelity said the bid did not “adequately” reflect fair value of DCC and its long-term growth prospects, saying it “would not accept anything below £70 in cash per share”.
Aviva’s view? “We firmly believe that [it] is not in the interest of our clients to sell the business at this level.”
A Ninety One equity manager said his group didn’t like the price while Marathon said the addition of the potential top-up was a minor tweak.
Fair enough but what should we make then of all four institutional investors selling shares into the market at prices below the level of this “underwhelming” offer – in some cases well below.
You might have some sympathy with Marathon as its comment is arguably fair and they still retain most of their DCC stake.
But Ninety One, whose original 3.4 per cent stake put some weight behind its comments, now owns just a fifth of that – 0.69 per cent. And Aviva has offloaded two-thirds of its holding, dropping from 2.2 per cent before the offer to just 0.7 per cent.
The DCC deal will be put before all shareholders on September 18th. Quite what retail investors are to make of it has yet to be determined. But actions, you suspect, speak louder than words.
