Abbey looks like MBO candidate

Another chairman/chief executive is Charlie Gallagher at housebuilder Abbey, where the Gallagher family controls almost 29 per cent of the shares.

If one believes the latest smaller companies offering from Goodbody, Abbey is the clear favourite to be taken private in the current year.

According to Goodbody, there are six characteristics that make a good management buy-out (MBO) candidate. These are listed as poor institutional support, illiquid stock, a depressed share price for a long time, an unjustifiably low rating, the capability to generate the higher return required by financial backers and sufficient debt capacity.

Abbey seems to satisfy most of these criteria. The Gallagher family own almost 29 per cent, its share price is well off its high for the past three years; its debt as a proportion of EBITDA is very low and its interest cover is very high.

"Abbey perfectly fits our model of the perfect MBO being a well-managed company that is highly regarded in its sector but whose share price has suffered from being too small and concerns in the market over the existence of a family business running parallel with Abbey," Goodbody states.