Battle over uncommitted Capital Bars shares

A crucial 5 per cent chunk of Capital Bars shares has not been committed to the 21p sterling (33.87 cents) a share offer for the company from the O'Dwyer brothers, Liam and Des. Nor has it been acquired by private investor Mr Austin Conboy.

This bloc of shares will decide whether the O'Dwyers will be able to compulsorily acquire the shares currently held by Mr Conboy.

Mr Conboy is understood to have picked up another 250,000 shares yesterday, to take his stake to just under 13 per cent of Capital's equity.

On a fully diluted basis, Mr Conboy's stake is in fact around 7 per cent, as a result of the 23.5 million Capital shares due to be issued to the O'Dwyers as part of a 1999 agreement between the brothers and Capital. Taking these unissued shares into account, the O'Dwyers have about 86 per cent of the total, an ESOP has between 1 and 2 per cent, and Mr Conboy has his fully diluted 7 per cent.

This leaves between 5 and 6 per cent not yet committed, and this bloc of shares may be the difference between the O'Dwyers compulsorily acquiring outstanding shares - including those held by Mr Conboy - and Mr Conboy remaining with Capital as a large minority shareholder in a private company.

If Mr Conboy manages to buy the remaining shares in the market, then he will realise his aim of getting over the 10 per cent level - which would prevent him being bought out at the O'Dwyers's 21p offer price.

If he fails and is bought out at 21p, then he will suffer a sizeable loss, as he has been buying Capital shares in the market at 25p and 26p. If his current 4.3 million Capital shares were to be compulsorily acquired, he would suffer a loss of some £172,000 sterling.

Given that scenario, market sources believe Mr Conboy will go aggressively into the market over the next few days to try and get the remaining shares that have not been committed to the O'Dwyers.

Meanwhile, the O'Dwyers have confirmed they intend to take Capital private and delist the shares from the London and Dublin markets. Trading in the shares in the next few days will decide whether the O'Dwyers take the firm private as 100 per cent owners, or have Mr Conboy present on the register as an unwelcome minority shareholder.