IFG shares fall 26% as takeover talks with Bregal end

IFG’S SHARES lost more than a quarter of their value yesterday after the company announced it had terminated takeover talks with Bregal Capital, the private equity firm which had been poised to buy the Irish company.

Bregal’s failure to meet the €1.80 per share price tag sought by the IFG board instigated the termination of the talks.

In a statement yesterday, IFG said both parties had agreed to discontinue discussions “in view of the current dislocation in global markets”.

The collapse of the talks came just under two weeks after IFG announced it had entered into an exclusivity agreement with Bregal Capital on a €231 million takeover. The €1.80 per share price had been lower than some had expected.

IFG first announced to the market that it had received a preliminary approach, believed to be from the UK-based private equity firm, in May. Two weeks later, a consortium including IFG’s largest shareholder Fiordland, also made an approach.

Expectation of the possible sale of the company sent IFG’s share price – which had been trading at around the €1.30 to €1.40 level before the takeover talks – close to €2 over the summer. Yesterday it hit lows of €1.15 before closing at €1.20, a fall of 26 per cent.

Speaking to The Irish Times yesterday, IFG chief executive Mark Bourke said the current economic climate had impacted on the process in terms of outlook, pricing and financing.

“We didn’t want to have an undervalued sale. Once we entered exclusive talks, we were not going to get into a process of constant renegotiation.”

He said the company had acted swiftly, pointing out that the official process did not commence until July after the company’s agm.

IFG chairman Joe Moran told shareholders at the agm that the company had received an indicative offer from Bregal Capital on April 21st which had been deemed sufficient. It had then proposed a conditional offer on May 11th. The second approach, from the Fiordland-led consortium, was made two days later with the terms of this conditional offer received on June 7th.

Both parties began due diligence in July, with IFG entering exclusive talks with Bregal in August.

Mr Bourke said yesterday the company would continue its strategy of steady growth through organic and bolt-on activity. IFG has recently refinanced and “has headroom for expansion”.