Desmond increases Golden Vale share

FINANCIER Mr Dermot Desmond has spent around £2.2 million increasing his stake in Golden Vale from 5.82 per cent to 8 per cent. The announcement was made by Golden Vale to the Stock Exchange yesterday, although the price at which Mr Desmond bought the share has not been disclosed.

Based on the recent price on the market, Mr Desmond appears to have spent almost £2.2 million to increase his stake to 8 per cent. His company, International Investment and Underwriting, now owns 12.597 million Golden Vale shares. Mr Desmond first invested in Golden Vale last June, spending around £6.2 million to buy a 5.82 per cent stake. The purchase followed similar investments in Unidare, Barlo and the Jones Group, with Mr Desmond appearing to target share prices which were languishing in the hope of making capital gains.

Golden Vale shares fell to around 55p in recent weeks but have since recovered to around 65p. The company has appointed a new chief executive, Mr Jim Murphy. It recently reported 1995 results, which showed a sharp fall in pre-tax profits from £16.5 million to £6.3 million.

Last night industry sources speculated that Mr Desmond, as with his other investments in the Irish equity market, may be banking on Golden Vale's share price recovering from current levels. Also, the Avonmore bid for Waterford Foods has focused market speculation on the prospect of rationalisation and mergers in the sector in the long term.