Jurys hotel saga was Dunne deal that surprised nearly everyone

A sharp jump in the company's share price signalled a revolution that would play out over months, with parties playing their cards close to the chest, writes Una McCaffrey

This time last year, Jurys Doyle was happily trading away as a public company with a handful of underperforming assets and a decent growth story across the rest of the business. There was nothing too exciting in all of this but, equally, nobody was too vocal in complaining about it.

This all changed at the start of May, with the first sign of the impending revolution coming in a sharp jump one Friday afternoon in the Jurys share price.

Accepted wisdom at the time said the movement was linked to talk of a planned sale of the group's seven-acre site at Ballsbridge and the boon that this would bring for shareholders.

On the following Monday, however, Jurys confirmed a weekend newspaper report that it had received an unsolicited takeover approach. The identity of the prospective buyer was not revealed, but it became clear later that week that it was Precinct, the three-man consortium that had taken Gresham private in 2004.

The stakes were of course bigger on this occasion, with the €117 million sale price for Gresham paling slightly beside the estimated €1 billion price tag on Jurys.

Nevertheless, the group comprising developer Bryan Cullen, hotelier JJ Murphy and solicitor David Coleman was determined. Most in the market saw the approach as having its roots in a desire to win Jurys' attractive land bank although Precinct never actually said this.

For the majority of shareholders, what mattered was how much money Precinct, or anybody else, might be prepared to pay.

However, for the Doyle sisters who owned 22.7 per cent of the company their father, PV Doyle, had largely founded, the matter had a different complexion. Taking a similar view, it emerged later, were the Beatty family, who held 7.2 per cent and had a long history with Jurys, and Elizabeth Nelson, a long-standing director who had another few per cent.

The first move from the Precinct consortium came with an approach at €15.25, which was rejected by the Jurys board despite being significantly higher than Jurys's habitual trading level at the time.

Another approach at €16.25 was also dismissed in early June, just before Jurys took the decision to put five of its seven acres at Ballsbridge up for sale by tender.

Unsurprisingly, the property world became very excited by the sale with some predicting that it would raise a cool €200 million for Jurys. The adjoining Berkeley Court, furthermore, was to be demolished and replaced with a new hotel.

Precinct, with an eye to the tender process and the cash it would leave in Jurys' coffers, continued to plug away with its bid. Along the way, it secured the backing of the enigmatic billionaire Reuben Brothers and Anglo Irish Bank. A new approach came at €16.50.

On July 27th, the Ballsbridge tender was awarded to wealthy property developer, Sean Dunne, who stunned the market by offering €260 million for the property. A couple of days later, a Precinct approach at €17.50 was duly made to reflect this. It was based on an 80 per cent acceptance rate, which was later reduced to 50.1 per cent after a request from the Jurys board.

The board then recommended the bid, thus removing the largest obstacle between the consortium and a €1.1 billion takeover. The Doyles and Beattys were said to be against the deal, however.

Precinct was given until August 19th to come up with a bid and, for most observers, it looked like the four-month saga was drawing to a close. How wrong we all were.

The first sign that things were about to get very complicated came one day after the Jurys board recommendation. A wave of frantic trading in the firm's shares one afternoon was met with bafflement in the market, as all involved wondered who was buying into the company at this stage. When the buyer, of 3.37 per cent, emerged as the aforementioned Dunne, eyebrows were raised even higher.

His motivation was unclear, but there were signals that he not only wanted to secure the Ballsbridge purchase but was also keen to buy the Berkeley Court site. The theory was that if he gave his support to Precinct in a takeover, Precinct would not stand in his way, at least on the first property.

If that wasn't enough to muddy the picture, there were strong market rumours at the same time that Quinlan Private, the investment group and Paddy Kelly, the developer, were also interested in bidding for Jurys. In the end, neither made an approach, but their presence on the Takeover Panel's list of interested parties did manage to serve as a distraction.

This was particularly true after it emerged on August 23rd that the Jurys board had withdrawn its support from Precinct because of funding problems at the consortium. Anglo Irish had pulled its support, leaving Precinct to frantically search for new debt backers.

HBOS stepped into the gap in the end but, by August 31st, the consortium's moment had passed and it was forced to exit the process.

In the meantime, Dunne had continued to add to his stake in Jurys, reaching 18.23 per cent by the last week in August. While the chances of Dunne bidding for Jurys himself were considered remote, he was said to be talking to possible private-equity backers. For his part, the developer indicated that he wanted to meet other large shareholders.

Dunne was not going to be allowed to vote on the Ballsbridge purchase because of his large shareholding in the company. He thus needed the other big players on the register to come out on his side.

The chances of this were never certain, and became even less so when a new buyer - developer Liam Carroll - started to buy shares at the end of August. At around the same time, Jurys decided it would sell the Berkeley Court after all.

Both Dunne and the immensely wealthy Carroll continued to buy, with Dunne falling foul of the Takeover Panel at one stage and being told he must sell a block of his stock. He did so, and then started to buy again, indicating now that he might make an offer for Jurys.

While Carroll settled at 8.3 per cent, Dunne didn't stop until he reached 24 per cent. Despite all the posturing, however, there was still no firm bid on the table for Jurys.

There was, of course, one party that had so far kept its intentions very quiet: the Doyle sisters. This all came to an end on September 6th when it emerged that the Doyles had been buying shares. The Beatty family then started to buy too, while Dunne's stake reached 28 per cent.

Soon, the Doyles had reached 29.9 per cent - the maximum level somebody can own without being forced to make a bid for the company. When this was joined with the Beatty holding and Nelson's stock, the collective position amounted to 42 per cent.

For Dunne, this must have represented a worrying development, particularly when the shareholder documents sent out in relation to his site purchase showed that the Doyles had not yet decided how they would vote on the deal.

A week later, the Doyles, Beattys and Nelson made an approach to the company on their own behalf, offering to pay €18.90 per share, or €1.2 billion for the company.

While ultimately not a surprising move, the shift added to the considerable focus settling on the extraordinary general meeting Jurys had scheduled to consider Dunne's Ballsbridge site purchase. There was talk of an adjournment to reflect the upheaval at the company but, in the end, Jurys chairman Richard Hooper pressed ahead.

Shareholders and journalists found themselves, on September 26th, in the unusual position of witnessing an exciting extraordinary general meeting.

Usually, such affairs carry foregone conclusions and are devoid of intrigue. In this case, however, all eyes were on John Gallagher, perceived face of the Doyle sisters, to see whether or not he would approve the sale to Dunne.

When the moment to vote came, he failed to budge, but it soon emerged that the family's shares had, in fact, been voted in favour of the deal.

This prompted observers to suspect a deal had been done with Mr Dunne whereby he would sell his shares in return for getting easy access to the Ballsbridge site. As it happened, however, no arrangement had been reached, despite Gallagher's best attempts in this regard.

The Doyle-led consortium came out with its formal offer in mid-October and, within a few days was claiming control of the company, despite Dunne's continued presence on the share register.

A key development came in mid-October when Liam Carroll said he would sell his 8.3 per cent stake to the Doyles, who would then have majority control of the company.

Mr Carroll was said to have made about €5 million from his deals - a tidy return for an individual who arguably entered the process too late.

Businessman Paschal Taggart, who had bought into a 2 per cent block of Jurys at €19.20 just a couple of days previously, expressed some surprise at the sale and then said he would have to exit too, registering a loss.

As for Dunne, his options were reducing as time progressed. Closure ultimately came at the start of November, when he said he would, after all, sell his shares to JDH, the Doyle-led consortium. He said the deal would make him a profit of about €20 million and declared himself "happy" with the investment.

In mid-November, he got his ultimate wish when Jurys decided he could buy the Berkeley Court too. With Dunne's €260 million from the Ballsbridge site already in the bank, Jurys has received another €119 million from the developer for the Berkeley Court.

As for the Doyles, their €1.25 billion offer for the hotel group formally closed last week. After seven months of twists, turns, shenanigans and spin, the company was finally sold.