Irishman in £175m bid for ports group

Mr John O'Connor, a Tipperary based management consultant has emerged as the principal behind a £175 million sterling takeover bid for Simon Group, the quoted British port operator.

Mr O'Connor, a former executive with British Aerospace, Thorn EMI and Plessey, is backed by venture capitalists Patron Capital and Commerzbank.

The businessman is best known in Ireland for his involvement with Mr Denis O'Brien in National Utilities, an independent utility company that was a forerunner of Mr O'Brien's ePower, the private electricity supplier.

Simon Group rebuffed a 75p a share friendly offer from O'Connor and Patron last week but sources close to the consortium say that they have not given up. A hostile bid is not contemplated at present.

"We will mount an aggressive friendly approach - shareholder pressure will be put on the chief executive," said one insider. It is understood the consortium are disappointed that Mr Maurice Dixson, the chief executive of Simon Group, did not put the offer to major shareholders or seek to enter into substantive talks.

The company's main assets are two ports on the east coast of Britain, Humber Sea Terminals and Port Southern Bridge. It is also the leading independent operator of bulk liquid and gas terminals in the UK.

Last year the group announced profits of £15.4 million in the 12 months to December 1999 on a turnover of £218 million. The 2000 results are due in early March from the company which was established in 1897 and employs 1,700 people.

Simon also has an interest in a terminal and two deep water berths on the Shannon Estuary through a joint venture with Vopak, a Dutch logistics company.

Mr O'Connor and Patron want to concentrate on building Simon's port business and part of their strategy will be to use his Irish contacts to develop joint ventures with other Irish ports that have been restructured as independent commercial state companies in recent years.

A senior executive working in the UK ports sector is also involved in the bid. If successful, Mr O'Connor and the other unnamed executive will have a 10 per cent stake in the business with Patron and Commerzbank holding the remainder.

The British group also owns Seawheel, a transportation and distribution company which operates a fleet of 16 ships servicing 17 European ports including Belfast, Dublin, Waterford and Cork. Patron and Mr O'Connor initially approached Simon before Christmas and indicated they were prepared to pay 65p per share as well as assuming the company's debts of £55 million.

This proposal was turned down and the consortium made a second offer in the new year of 75p per shares to Close Brothers, the corporate finance company advising Simon.

This bid values the company at £120 million sterling and when the assumption of the group's debt is taken into account, it is worth £175 million. The consortium will now focus on trying to win the support of the five institutions that own 35 per cent of the group. They include Prudential with 11.99 per cent; Baring Brothers with 7.25 per cent; and UBS who own 6 per cent.

Mr O'Connor declined to comment on the deal this weekend but confirmed he was a client of Patron and Commerzbank.