One51 expected to make offer for ICG soon

A bid by the One51 consortium for Irish Continental Group (ICG) will now exceed €20.50 a share, following the consortium's purchase of 9 per cent of the shares at that price late last week.

The Philip Lynch investment vehicle One51 and the Doyle Group, a Cork shipping company, have now almost doubled their stake in the Irish Ferries operator, holding 17.5-18 per cent of the company.

One51 and the Doyle Group have now spent more than €90 million in building up their stake in ICG, following the consortium's €43 million outlay on 9 per cent of the company shares on Thursday. It purchased the shares from a number of hedge funds.

The consortium is expected to make an offer for the company shortly, once a due diligence process is completed.

It is understood that One51 and the Doyle Group hope to start examining the ICG books as early as tomorrow.

The consortium cannot make a lower offer than the highest amount they have paid for shares, meaning the lowest offer in any possible bid has edged further ahead of the rival management-led offer of €18.50 a share.

At a minimum of €2 per share more than the management buyout offer tabled by ICG chief executive Éamonn Rothwell and his colleagues, with the backing of AIB, any counter-bid by the One51 consortium to take the company private is set to prove more attractive to ICG shareholders.

The Rothwell-led buyout vehicle, called Aella, must get 75 per cent shareholder approval for its offer, which is being backed by AIB.

Shareholders are due to vote on the management offer at meetings in Dublin on April 12th. However, the independent directors of ICG said last week that these meetings would be adjourned.

The independent directors, John McGuckian, Peter Crowley and Bernard Somers, also said they had held initial talks with the One51 consortium regarding its proposed offer.

The directors are likely to seek further meetings with One51 and the Doyle Group to clarify a statement the consortium issued last Wednesday indicating that it was "in discussions regarding a possible offer to acquire the entire issued, and to be issued, share capital of ICG".

The statement said the possible offer would be at a level of "not less than €20 per ICG unit", with each unit comprising one ordinary share and three redeemable preference shares.

The One51 consortium's move to double its stake last Thursday means that €20.50 is the new benchmark for any offer it makes to shareholders.

Having now spent an estimated €92.3 million on ICG shares at prices above €18.50, the One51 consortium will oppose the Aella bid and is in a strong position to block it.

ICG shareholders have seen their shares rise significantly in value since Mr Rothwell and his management buyout team launched their bid for the shipping company on March 8th.

The company's share price has climbed from €15.60 on March 7th to a closing price of €20.25 before the Easter break, a gain of almost 30 per cent.