Financier Mr Dermot Desmond has increased his stake in foods group Golden Vale to just under 11.6 per cent after buying another 1.75 million shares.

Yesterday's disclosure to the Irish Stock Exchange does not indicate when Mr Desmond bought the additional shares. The last time he made a disclosure was in March 2000 when he increased his stake from 8.3 per cent to 10.2 per cent. His 11.6 per cent stake makes him by far the largest shareholder in the foods group.

Two years ago Mr Desmond built up an 8 per cent stake in Golden Vale and then sold the shares on to institutional investors at a £5 million (€6.4 million) profit. Mr Desmond has never commented publicly on his return to Golden Vale, but some sections of the market believe his purchase of 11.6 per cent of the company may not be simply an investment.

Mr Desmond also has a 14 per cent stake in another Irish foods group Greencore. Both Greencore and Golden Vale have been expanding out of their commodity agri-businesses into added-value consumer foods, and there has been regular speculation that Mr Desmond might be interested in putting the two groups together into a large Irish consumer foods group in which he would have a substantial stake.

Greencore currently has a market value of €550 million while Golden Vale is worth €146 million.

Greencore is in the process of completing a £258 million acquisition of the British foods group Hazlewood, while Golden Vale recently withdrew from a planned £130 million bid for another British group Prize Foods. Golden Vale is currently considering the sale of its milk processing operations in Charleville to Golden Vale Co-op. In November, Golden Vale rejected a £22 million offer for the milk processing operations from the co-op.