Lynch opts out of Adare bid talks

The consortium led by Adare Printing Group's chief executive, Mr Nelson Loane, is now the only party in takeover discussions with the group. This follows the withdrawal of proposals for an MBO led by finance director Mr Peter Lynch.

A brief statement from the independent committee comprising non-executive directors of Adare said it had considered proposals from both groups and that one had been withdrawn. "Accordingly, the committee has instructed its advisers to enter into detailed discussions with one group led by chief executive Mr Nelson Loane. These discussions may or may not lead to an offer being made for all the issued share capital of Adare. A further announcement will be made as soon as possible." The reason for Mr Lynch's withdrawal has not been disclosed. However, industry sources say Mr Loane was able to suggest a higher price because his proposals do not include an offer of shares to the management.

This price is understood to be in excess of €10 per share, compared with Friday's closing price of €8.35. Mr Lynch said he had "no comment" to make, but "wished them [the Loane consortium] well". Asked about his own position within the group, he again said he could "make no comment".

However, it is thought he will remain with the group until the bid process has been completed. He is then likely to resign. Mr Lynch initiated the move to turn Adare into a private company through an MBO involving 85 to 100 managers. Mr Loane, who has an 8 per cent stake in Adare, did not join this group; instead, he began his own approach, backed by venture capitalists Allen McGuire & Partners, an IFSC company which manages US funds and is backed by US pension funds. Mr Lynch was backed by Mercury Private Equity, a subsidiary of the US Merrill Lynch group.

Allen McGuire is already involved in the printing and packaging business. It purchased the printing activities of the Aspen Group in Britain for £10.5 million sterling in 1998. It also bought CCA, a greeting cards company. The Loane bid package may involve backing these companies into Adare to form a larger group. Mr Loane will now have to enter into talks with the Adare managers who had backed Mr Lynch.