Andor shareholders to decide if high-tech Cinderella venture has a fairytale ending

BELFAST BRIEFING:Andor has huge potential but has yet to deliver on its promise, writes Francess McDonnell

THERE IS the promise of a hint of drama tomorrow in west Belfast when shareholders in Andor Technology get the opportunity to vote on a proposal to take the company private.

Andor is not only one of the North's best-kept secrets; it is also one of its most frustrating.

On paper, the Northern Ireland company's potential appears limitless. But Andor has been in operation for nearly 18 years and has yet to deliver on its early promise.

It began life as a Cinderella-type venture in the physics department of Queen's University. Its founders - Dr Hugh Cormican, Dr Donal Denvir and Mike Pringle - unhappy with the cameras that were then available for their demanding research, decided to develop their own.

News of the success of their early scientific camera equipment quickly spread. Requests to use the equipment from other Queen's researchers and then rival universities flooded in and the scientists realised they had discovered something quite amazing.

Andor was established in 1989 to take advantage of these new commercial opportunities. It now produces high-specification camera equipment for a range of scientific imaging and research.

Over almost two decades, the company has grown and expanded to employ 190 people in 15 offices around the globe. In 2004, it decided to seek a listing on London's Alternative Investment Market as a way of raising funds.

But its shares have enjoyed a less than sparkling performance on AIM over the last 18 months and, according to industry analysts, are unlikely to recover lost ground in the immediate future.

Andor's management team now believes its previous "objectives are no longer achievable by Andor in its capacity as a listed entity".

This brings Andor's future sharply into focus and raises one vital question: where does it go to raise funds to grow the business?

Last July, Andor confirmed it was in an advanced stage of discussions with members of Andor's management team regarding a potential offer for the company at 73 pence a share in cash. The people behind the offer - senior Andor executives and private equity investors - set up a company called Thorndale to promote their bid.

But in true fairytale tradition, nothing is ever straightforward.

Another potential suitor emerged for Andor in the shape of Carraig Capital, an investment group controlled by the Cavan-based founder of Kingspan, Eugene Murtagh and his son Paul.

Carraig was joined in its bid by former Andor chief executive and co-founder Dr Hugh Cormican, who had stepped down from the Belfast company's board last year.

Between them, Dr Cormican and Carraig Capital control about 12.4 per cent of Andor's shares. Carraig made a "potential offer" of 76 pence a share in cash, which it then upped to 80 pence per share.

Following the potential offer from Carraig, Andor's independent directors declared they no longer considered the basic cash terms of the Thorndale offer to be fair and reasonable.

The potential offer from Carraig came to nothing because Andor's independent directors informed Carraig they were not prepared to recommend its offer price of 80 pence per share with specific terms attached.

Carraig decided not to continue discussions with the independent directors in relation to a revised proposal. That leaves the Thorndale proposal on the table and shareholders with little choice.

A Court Meeting and extra ordinary general meeting is scheduled to take place where shareholders will get the chance to vote on Andor's future direction.

Andor's independent directors have unanimously recommended that shareholders vote against the resolutions to be proposed and against the resolutions to be proposed at the EGM to approve and implement the Thorndale Offer.

At stake are not only the jobs of Andor's 190 employees but also the dreams and ambitions of a company with a huge potential.

Andor was born in the arena of limitless possibilities in a physics lab. But it has become a reality in the Springvale Business Park in west Belfast in one of the North's bleakest unemployment blackspots.

It represents the future for the North's economy - a hi-tech, export orientated, entrepreneurial company which generates well-paid jobs.

Tomorrow Andor's shareholders will get the opportunity to decide where this company's future lies.

The question now is can Andor's many, varied shareholders agree a happy ending for this hi-tech fairytale.