A company controlled by property developer Mr Liam Carroll has purchased a 12 per cent plus stake in Dunloe Ewart, the property firm which is proposing to go private.
Vantive Holdings purchased 10.8 per cent on Wednesday but is understood to have been in the market yesterday with the purchase of a further 1.5 per cent, when the shares rose six cents to 48 cents, a new high. The purchases have come at a crucial time, just days before next Wednesday's extraordinary meeting called to sanction the privatisation move.
They could lead to a takeover bid, according to some sources, but the motives behind the move have not been revealed. The 12 per cent stake could be used to block the privatisation move and to force Dunloe to sell some of its portfolio. However, Dublin solicitor Mr Noel Smyth and his family own 22.5 per cent of Dunloe and could muster further backing in the event of a fight for control of the company. A spokesman for Vantive said he could make no comment.
One analyst said Vantive was obviously going to vote "no" on the buy-out, or it may arrange something separately with the company. He added that a buyer of Dunloe would probably get at least 70p per share by liquidating its assets. Dunloe recently reported an adjusted net asset value per share of 67p at the end of the first half of 2000. A brief statement from Dunloe Ewart said it had been made aware that a number of significant shareholdings had changed hands and that it would be "seeking a meeting to clarify their intentions". However, the purchaser has not identified itself to Dunloe. Vantive, however, will be legally obliged to identify itself within five working days, or by the eve of the e.g.m.
The purchaser paid around £16 million for the shares, or 48 cents per share, which is just three cents below the privatisation offer. Significantly, it is above the cash element of the offer. There was some speculation last night that Vantive might be part of a consortium.
The Dunloe privatisation offer comprises just 34 cents in cash and the remaining 17 cents is in unsecured loan stock. It is known that the institutional shareholders are not enamoured of the loan stock.
The identity of the institutions which sold their shares has not been disclosed but they are understood to include Bank of Ireland Asset Management with 4 per cent, and possibly Fidelity with 4 per cent. Aberdeen Asset Management has also been mentioned as a possible seller.
Mr Carroll is involved in a number of property development companies. The last annual return for Vantive listed 31 companies of which he was a director. He is the largest apartment builder in the State and has been responsible for redeveloping much of the inner city in Dublin, including Bachelors Walk and the former Richmond Hospital. And he is awaiting planning permission for a £230 million office development scheme at South Bank Road at Ringsend.
Mr Carroll's best-known company is Zoe Developments which has built thousands of apartments in Dublin over the past decade. The company - and Mr Carroll - has been severely criticised for safety standards on its construction sites.
Mr Carroll has run a very successful business with substantial funds available, according to property sources, and has recently moved into the commercial area. Dunloe has a substantial property portfolio but insufficient funds to develop it, which is why it is proposing to go private. A number of Dunloe's properties would be of interest to Mr Carroll. Particularly attractive would be the development site on the south side of Sir John Rogerson's Quay. Dunloe applied for a mixed use development at the end of last year. It is looking for 231 apartments, 27,469 sq. metres offices, 3,228 sq. metres laundrette, creche, 453 sq. metres leisure and 448 car spaces.
Liam Carroll profile: page 7
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