Jurys board drops support for Precinct

The board of Jurys Doyle last night withdrew its support for the Precinct Consortium's €1.1 billion takeover approach over doubts about how the deal would be funded.

It is believed that Precinct's main banker, Anglo Irish Bank, said it was no longer in a position to back a takeover. The bank is thought to have exited the process after Precinct's key investor, Simon Reuben, pushed for better loan terms.

The Jurys board will furthermore have been influenced by yesterday's aggressive stake-building by developer Sean Dunne, who had accumulated an 18.23 per cent stake in the hotel group by close of business.

Given that Mr Dunne paid an average of €17.80 for his shares, it was clear that he would not have supported Precinct's approach at €17.50. The approach had already been opposed by the Doyle and Beatty families, who together control 30 per cent of Jurys Doyle. Mr Dunne's purchase would thus have created a blocking stake of almost 50 per cent.

A spokesman for Precinct said last night, however, that the consortium, led by developer Bryan Cullen, was still involved in the takeover process.

"We're actively working to address the funding situation and are hopeful we will succeed," he said. It is understood that Mr Reuben, a billionaire investor, continues to back the group.

In a statement to be issued to the stock exchange this morning, Jurys said it had been told yesterday that Precinct had lost its bank funding.

"In addition Precinct has not satisfied the board on the availability of alternative funding facilities," the company said, adding that the consortium's due diligence exercise had now been terminated.

The board also noted Mr Dunne's share purchases and confirmed that it had not received any takeover approach other than those made by Precinct.

Mr Dunne, who has agreed to buy part of the hotel group's site at Ballsbridge in Dublin for €260 million, yesterday spent nearly €170 million to make himself the largest individual shareholder in Jurys. Between yesterday's purchases and earlier deals, he has spent about €205 million on building his stake, buying a large portion of shares at €18.00.

It is thought that while he is not interested in taking over Jurys himself, he would be unwilling to support a bid from any other party unless it came at a significant premium to €18.00.

With a stake approaching 20 per cent, his position will be taken seriously by anybody sizing up the hotel company.

Mr Dunne is also believed to be interested in buying more properties from Jurys and, with this in mind, is strengthening his hand in advance of any negotiations. In the short term, meanwhile, he will take some comfort from the special dividend his Ballsbridge purchase will trigger for Jurys shareholders.

In a statement issued yesterday afternoon by Dolmen Stockbrokers on behalf of Mr Dunne, the developer made it clear that he had not yet approached any shareholders in Jurys or the company.

He added, however, that he would try to do so within a week "for the purpose of endeavouring to determine a strategy for the company going forward".

While a number of parties have expressed an interest in bidding for Jurys, the only group to have made a move before yesterday was Precinct.

Quinlan Private and developer Paddy Kelly are meanwhile continuing to monitor developments with a view to making an approach.