Senior management at Alphyra propose buyout


Alphyra's senior management has approached the company about a possible management buyout (MBO), just five-and-a-half years after flotation.

A 10-member team, led by chief executive Mr John Nagle and finance director Mr John Williamson, is believed to be planning an offer at a premium of around 25 per cent to the current share price.

Alphyra shares closed unchanged at €1.55 last night, pointing to an offer price above €1.90.

For any offer to be successful, it would have to receive the approval of the company's largest shareholder, Bank of Ireland Asset Management, which holds a 24 per cent stake.

Other large shareholders include Newton Investments, with nearly 10 per cent of the company, and Prudential, which holds more than 8 per cent.

Alphyra, formerly known as ITG, confirmed it had received an approach from members of senior management yesterday.

"Discussions are at a preliminary stage and there can be no guarantee that this will result in an acceptable offer for the company," Alphyra said.

It was not clear last night whether chairman Mr John McDonnell was part of the MBO team, alongside Mr Nagle, who owns 5 per cent of Alphyra's shares. But Mr Nicholas Koumarianos was listed by the company as the non-executive director dealing with all inquiries, a role usually taken by the chairman unless he is involved in an offer.

Alphyra, which provides electronic transactions services, became the first firm to list on the Developing Companies Market when it floated in May 1997.

The company's shares hit a high of €22.10 in February 2000, at the height of the technology boom, but have fallen steadily since to reach a low of €1.40 earlier this year.

Analysts said that an MBO had a certain logic to it. While the company has relatively mature businesses in the Republic and Britain, its European operations are at an early stage of development.

"I can see a strong case for the company being taken private. It would allow them to focus on the rollout," one analyst said, adding that the market didn't have the patience for a company at Alphyra's stage of development that private investors would have.

The share price has suffered in the wake of recent results statements from the company, which included large write-offs that Alphyra said were necessary to put it in a position to go forward as a profitable transactions business. Mr Nagle has expressed his shock and disappointment at the negative market reaction to its results in the past.

Alphyra also released an update on its third-quarter performance yesterday, saying the positive trends in transaction growth seen in the second quarter had continued in the latest three-month period.

The company reported "solid growth" in pre-paid cellular and utility transactions alongside a slight decline in electronic fund transfer EFT transactions, which it attributed to seasonality in its European business.