This Week In The Markets

After the Avonmore merger with Waterford, many in the market might have felt that corporate activity might slow down for a while, but that seems to be far from being the case.

On the contrary, the Irish market may be facing a period of unprecedented corporate activity involving a whole raft of companies in a diverse range of sectors.

Next week will see the final confirmation that GE Capital - owners of GPA - is spreading its Irish wings with the acquisition of Woodchester for around £600 million. That is higher than GE Capital probably expected to pay, but the late arrival of an interested party has upped the ante and GE Capital will end up paying a full price for the Irish lending company.

Next on the list is New Ireland. And, despite suggestions from managing director, Mr Jack Casey that a sale is only one of the options available to majority shareholder SunLife & Provincial, most in the market are convinced that it will be only a matter of time before New Ireland moves to a new owner. That new owner could be any one of a dozen financial companies keen to boost their presence in the life assurance. How much for New Ireland? The price in the market suggests around £19.50 a share - more than £200 million, but there are a whole host of factors that affect the valuation of a life assurance company. The minority shareholders who hold 17 per cent of New Ireland are in an enviable position - any buyer will not want the nuisance of a small group of minority shareholders and that is a factor that will undoubtedly add to the buyout price.

The sale of the Dalgety bakery ingredients businesses presents the novel situation of two Irish companies, Kerry and Greencore, probably bidding for either part of the business. While Greencore's Mr David Dilger has hinted that his company might look at both parts of the Dalgety business, industry sources believe that Greencore would be content to snap up the Spillers flour business for around £150 million and leave the Lucas ingredients business to Kerry for around £250 million.

Mr Garry Weston at ABF, of course, might have a say in the destination of the Dalgety businesses. But if Kerry is successful, expect a share issue. Placing 5 per cent of new shares would raise around £60 million, but Kerry might have to think of raising more cash for a Dalgety deal given the level of debt on its balance sheet. A rights issue where Kerry Co-op would not take up its rights seems more likely.

If Greencore does the deed, that ends the prospect of a share buyback and would probably mean that Greencore would have to put on hold any plans to rebuild its stake in Imperial Holly.

And finally to Smurfit where a restructuring of JS Corp seems likely within the next few weeks. Merging JS Corp with another US packaging group seems the most likely option, but Smurfit might still need to inject £600 million in equity into the merged company. It's a moot point whether Smurfit will fund that cash call through more debt, a share issue or by selling off some of its non-core operations in the US and Europe.

What a year for the corporate financiers!