Dunloe House, the property company controlled by Dublin solicitor Mr Noel Smyth, is gearing up to make a takeover bid for Ewart, the Belfast property company in which he has a 26.5 per cent stake. A brief statement from Dunloe said it has "approached" the Belfast company "with a view to merging both companies. These discussions may or may not result in an offer being made to the Ewart shareholders". Dunloe shares were unchanged at 23p in Dublin yesterday. Ewart shares were unchanged in Dublin but rose 5p sterling to 75p in the London market. No one was available for comment from either Dunloe or Ewart.
As Dunloe is much larger (valued at £83 million) than Ewart (valued at some £26 million) any amalgamation would, in effect, represent a takeover of Ewart. Mr Smyth would be able to use his large voting strength in a contested bid. And he would also probably have the support from Ewart's chairman, Mr Brian O'Connor, who has a 15.9 per cent interest. However, the tone of yesterdays statement indicates that Dunloe is seeking a consensus. Ewart has, in the past, resisted takeover approaches. Five years ago, it thwarted an approach by Monarch Properties, controlled by Mr Phil Monahan, who was advised by Mr Smyth. Mr Smyth subsequently acquired a shareholding in Ewart, and a seat on the board, and relations are understood to have improved considerably since then.
Industry sources say the management of Ewart has not welcomed the approach by Dunloe which has been expanding at a far greater rate than Ewart. But the executive directors have only a nominal shareholding. The last annual report shows Mr Barry Gilligan, chief executive, with 73,000 shares, and Mr David Robinson, executive director, with 32,500 shares. Non-executive director, Mr Harold Ennis, has 48,518 shares. Combined they represent less than 1 per cent.
The chairman, Mr O'Connor, with his 15.7 per cent holding, would be expected to support any reasonable proposition from Dunloe. It would also give him a shareholding in an enlarged group with a more diversified portfolio.
Ewart has no properties in the Republic and is mainly involved in property development in Belfast. The Laganbank development is its flagship. Its latest results showed record profits of £2.6 million sterling for the 14 months ended June 30th, 1997, compared with £1.8 million in the previous 12 months. Turnover amounted to almost £15 million compared with £7.8 million. Ewart has been expanding but at a much slower rate than Dunloe. The Belfast company, for example, acquired a site in central Belfast which has outline planning permission for building 70,000 sq ft of offices. It completed its De Courcy Shopping Centre in Carrickfergus, Co Antrim, with Tesco as its anchor tenant. Ewart, with its partner, Ladbroke Group, is adding an extra floor to the Hilton Hotel in Belfast, due to open next year as Northern Ireland's largest hotel with 193 bedrooms. There are also plans to build apartments and a 50,000 sq ft leisure complex at Lanyon Place. A lucrative development has been the expansion of its car-parks division. It recently won a management contract with the Hilton Hotel in Kensington, London, and acquired a surface car-park, in Ayr, Scotland, for £1.1 million. Dunloe took a big big leap forward in September when its shareholders sanctioned the acquisition of new property for £21 million payable in Dunloe shares. It also raised £25 million in a placing of new shares. The properties were purchased from Mr Smyth and his family interests, and from property developers, Mr Phil Monahan and Mr Dominick Glennane. The largest property in the portfolio was Cherrywood, Loughlinstown. Others included Cork Farm Centre, Elm Court, Co Cork, Poplar House, Co Kildare, Bloomfields Shopping Centre, Co Galway, and offices and a warehouse in Nutgrove Avenue, Co Dublin. Mr Monahan has a 15 per cent stake in Dunloe, following the sale of some of his properties. If Dunloe succeeds in taking over Ewart, he would end up with a stake in the enlarged group.
