Eason shareholders approve property split

Shareholders of Irish retailer Eason and Son Ltd have approved the company's plan to split its properties into a separate legal entity.

A spokesman for Eason confirmed shareholders had “unanimously” passed the resolution at an extraordinary general meeting on Tuesday night. This will have the effect of splitting the company into an operating company and a property entity.

It is understood only a small number of shareholders attended the meeting, with most voting by proxy.

Restructuring

In a letter to shareholders

, Eason chairman James Osborne said the restructuring would streamline the group structure and allow for future property and/or trade disposals.

This will give the company the opportunity to create a potential liquidity event for Eason’s 239 shareholders by selling either the property portfolio or the retail arm although it is understood that there are no plans currently to dispose of either entity.

In addition, it protects the value of the properties from any potential liabilities of the retail business, which has been under pressure since the economy collapsed in 2008. Management also believe it could strengthen their hand in negotiating rents with third-party landlords.

According to documents circulated to shareholders before the EGM, the Eason shop properties that have greatest equity are O'Connell Street and Tallaght in Dublin, Patrick Street in Cork, Shop Street in Galway and O'Connell Street in Limerick. These have a net book value of about €29.5 million.

New holding plc

Eason & Son Ltd is likely to have about €30 million of reserves to facilitate the distribution of the five properties to the new holding plc.

Eason Holdings plc will now operate as the overarching entity for the group. The reorganisation is expected to be be tax-neutral for all shareholders.

Eason made a profit of €2.6 million in the year to the end of January 2013 compared with a loss of €5.3 million in the previous 12 months.