One51 share sale fuels price speculation

Trade above Capvest’s €1.80 per share offer may suggest higher bid is attainable

Shares in One51 yesterday sold at more than the €1.80 offer tabled by private equity fund Capvest, sparking speculation that a higher bid for the plastics and recycling group could yet materialise.

Capvest has told One51 shareholders that it is willing to pay €1.80 a share – almost €290 million – for the group, and is likely to proceed with a formal offer if enough backers indicate that they will sell at that price.

However, 4,000 of the group’s shares sold yesterday at €1.82, ahead of Capvest’s likely offer. The trade followed an earlier one for 5,556 units at €1.75, which was more than the €1.72 at which the stock was priced last week.

The small number of shares sold is normal for One51, as the stock is tightly held and existing investors do not generally trade large amounts of equities on a day-to-day basis.


Higher offer

The trade at €1.82 triggered some speculation that an increased offer for the company may be in the offing.

However, Capvest has been talking to the company since February and it is not thought that the fund is likely to up the price that it has already discussed with it and the shareholders.

According to recent reports financier Dermot Desmond, who already owns more than 6 per cent of One51, has told brokers he is willing to pay €1.95 for more shares in the group, although he is not considering a rival offer.

Merrion Stockbrokers analyst Darren McKinley said yesterday that he did not believe that the Capvest offer for One51 would succeed in the first place as it undervalued the business. Instead, he argued that €2.18 was a fairer figure.

“I cannot see this deal going through,” he said. “Instead I think that you will find in 16-18 months that One51 will go to the stock market and you will see it floating at around €2.50.”

Market position

He suggested that revenues from the plastics division alone could increase to €300 million by the end of 2016, from €122 million. Mr McKinley pointed out that the business, whose products include wheelie bins, has a market-leading position in


and Britain.

In addition, he said that its recent purchase of a majority stake in Canadian manufacturer IPL opens the door to a growing north American market.

The hazardous waste and metals recycling operation was looking at similar growth, the analyst said, as it had a strong focus on the Irish and British building industries, both of which have begun expanding again.

One51 earned profits of €12.7 million last year, multiples of the €2.8 million recorded in 2013. Sales were €276.5 million.

It emerged from food group IAWS – now Aryzta – in 2005 and it still has a number of its co-op shareholders from that time.

Current investors include Pageant Holdings, Kerry Co-op, Larry Goodman's Vevan and Fane Valley Co-op.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas