Irish Continental Group (ICG) is set to be taken private following a decision by the ferry operator's independent board members to recommend a €471 million cash offer from its chief executive Eamonn Rothwell and four other members of the management team. Ciarán Hancockreports.
The offer from a company called Aella values ICG's shares at €18.50 each, an 18.6 per cent premium on the closing price on Wednesday.
Shares in ICG, which was advised by NCB, have steamed ahead since last September, when it announced details of a redundancy programme for crew on its Irish Ferries routes to Britain. At that time, ICG traded at €10.67. "This offers a good liquidity event for shareholders," Mr Rothwell said.
The management buyout (MBO) team, which is being advised by Goodbody Stockbrokers, comprises Mr Rothwell; finance director Gary O'Dea; Tony Kelly, its marketing chief; company secretary Tom Corcoran; and John Reilly, Irish Ferries operations director.
AIB is providing €499 million in debt for the deal. This includes a guarantee of €17.99 million relating to the lease of a ship. It is providing a further €20 million working capital facility to the company.
Management currently owns 14.1 per cent in shares and options, which will be rolled over into the new entity. Their stakes are valued at about €50 million based on the offer price.
News of the deal sparked frenzied buying of ICG shares. About 2.3 million shares changed hands yesterday, well up on the normal volumes of about 55,000 a day. ICG closed yesterday in Dublin at an all-time high of €19.30, having earlier traded as high as €19.50.
Analysts said the MBO team might now have to increase its offer. "This suggests that the market places a higher value on the shares," said Stephen Furlong, an equity analyst with Davy. Sources close to the MBO team suggested the price would not be raised.
Given that this is a recommended offer, a rival bid is not thought likely, especially as the MBO team owns 14.1 per cent of the equity.
ICG published its full-year 2006 results yesterday, which showed it recorded a pretax profit of €32.3 million in the 12 months to the end of December. This compared with a €15.8 million loss in 2005, when it incurred a €29.1 million charge for a restructuring programme relating to the outsourcing of jobs to workers from eastern Europe.
Analysts said the move might be a play on ICG's property assets, particularly a 33-acre site at Dublin Port.
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