Entrepreneurs snap up 18.55% shareholding in Unidare
Financier Mr Dermot Desmond and venture capitalist Mr Pierce Casey have added to speculation on the future of Unidare by taking an 18.55 per cent joint shareholding in the engineering group.
The investment was made through Beechworth International Ltd which is controlled equally by Mr Casey and Mr Desmond. Beechworth bought 2.6 million shares at €2.10 (£1.65) at a total cost of €5.4 million (£4.25 million). This represents a 13.5 per cent of the company.
In addition Beechworth has agreed to acquire the 5.05 per cent stake in Unidare already held by Mr Casey. On the basis of yesterdays share price the combined stake is worth about €7.5 million (£5.9 million).
Neither Mr Casey or Mr Desmond was available for comment last night, but market sources said last night that the future of the group is now in question. They said that the investors saw value in the currency Unidare share price and would hope to gain whatever the future of the group.
One possible outcome of the purchase, sources believe, is that the businessmen may attempt to take the company into private ownership. The Unidare share price has fallen back this year mainly, due to worries about the strength of the UK economy where it does a substantial business through its subsidiaries Centrajet and Oerlikon. From last year's high of €3.81 the price has been as low as €1.60 in January.
The company has suffered from lack of interest among European fund managers in smaller second-line stocks, which has led to conjecture about the future of a number of companies.
Mr Casey and Mr Desmond may have regarded now as the ideal time to buy into the company. Close attention will now be paid to whether they purchase further shares over the next couple of days. If they take their stake over 20 per cent, then they will be in a strong position to block any other bidders. To compulsorily acquire all a company's shares, any investor must control over 80 per cent of its equity.
A number of second-rank stocks are expected to be taken private, with the remains of Jones Group already following this course through a management buyout led by its former chief executive, Mr Pat Nevin.
In an ironic twist, Mr Casey, also purchased a stake in the Jones Group shortly before its shareholders decided to vote in favour of a management buyout.
Mr Desmond has already made a £2 million profits from investing in Unidare, when he sold his original 18 per cent stake last year at 260p a share.
Unidare's full year profits were up 19 per cent to £8.2 million when announced in November. At that stage the company warned that uncertain market conditions would make it hard to improve on that figure. As a result forecasts were reduced with NCB lowering its earnings per share figure from 29p to 26.5p.