Kingspan directors have no worries on share price

THE Kingspan directors have no worries about the share price, chairman and chief executive, Mr Eugene Murtagh, told shareholders at yesterday's extraordinary general meeting. The shares, he argued, were undervalued and had a long way to go.

Responding to a shareholders' query about two directors not taking up new shares under the rights issue (Mr Eugene Murtagh and Mr Brendan Murtagh), and one director (Mr Eoin McCarthy) selling shares, Mr Eugene Murtagh, stressed it did not indicate a lack of confidence in the business. It would have been expensive to take up the rights [it would have cost him £6.5 million] he said, noting that institutions had indicated they wanted to see a bigger shareholder base. The Murtagh brothers will have a combined stake of 40.8 per cent in the company, after the rights, compared with 47.6 per cent prerights.

Mr McCarthy who raised almost £1.8 million through the sale of 340,000 shares at 525p per share last week, explained that he wanted to sell the block earlier but was advised to wait until the deal with Ward was agreed. Mr McCarthy's stake has been reduced to 750,000 shares, or 2.7 per cent of the group, prerights.

Mr Eugene Murtagh said the takeover of Ward, which was approved by shareholders yesterday, provided a big opportunity and it was now up to the company to make it work. "While it will involve us in a lot of work, I have no doubt that in the medium to long term, Ward will benefit the group greatly."

Kingspan was valued at £38 million (the 3 in the £38 million was omitted from yesterday's Business Opinion) 19 months ago. It will have a value of around £170 million after the rights issue. The rights are on the basis of, one new share at 440p for each six shares held. The issue has been underwritten.