Flogas makes no decision on DCC offer


THE four independent directors of LPG group Flogas met yesterday, but took no decision on a recommendation for the 275p per share offer from DCC. It is thought that some statement from the independent directors may be released today.

Meanwhile, DCC has disclosed that its total holding in Flogas after buying in the market in the past week stands at 19.84 million shares or 78.06 per cent of the total equity.

On February 23rd, DCC increased its stake in Flogas from 60 per cent to 77.3 per cent after buying 4.54 million shares in the market at its proposed offer price of 275p per share. One of the big sellers of Flogas that day was AIB Investment Managers. which sold 2.65 million shares to DCC. This represented virtually AIB Investment Managers' entire 10.5 per cent stake in Flogas.

Two institutional shareholders, Scottish Provident and Friends Provident, have since come out strongly against the DCC bid, describing it as "opportunistic" and too low. Both institutions have said they will reject the bid, a move that could put it in jeopardy as DCC may not be able to secure enough acceptances to compulsorily acquire the remaining minority shareholdings.

One solution thought to be under consideration is the payment of an enhanced or special dividend to Flogas shareholders. a move that would increase the cash value of the shares held by the minority shareholders.

However, this would eat into Flogas's estimated £12 million cash pile, which would have reduced DCC's overall bill.