Two rival management groups are competing to take Adare Printing private, with chief executive Mr Nelson Loane having told the board he is investigating a management buyout (MBO) to compete directly with the group headed by finance director Mr Peter Lynch.

The development at Adare, where the group's two most senior directors are trying to put together rival bids, is extraordinary and market sources in Dublin said they could not recollect a similar situation. It is understood that Mr Lynch's MBO proposal has been revitalised in the past two weeks.

Mr Lynch refused to make any comment last night but it is now understood that his group includes around 100 senior managers and divisional heads and that finance from Irish and British venture capitalists is in place.

It is understood the Lynch MBO group is unlikely to lodge a formal buyout proposal until Adare's full-year results are released mid June.

Mr Loane, who is thought to own around 9 per cent of Adare between the shares he owns directly, his options and shares held by family members, must now put together financing for his buyout group.

Some sources have indicated, however, that the fact the vast majority of Adare managers are involved with Mr Lynch's group may make it that much more difficult for Mr Loane to attract the required funding.

While Mr Loane is highly regarded by Adare's institutional investors, these shareholders will decide the outcome purely on the basis of price and not how they believe Adare will be managed as a private company by the rival management groups.

"It'll all come down to money. It's irrelevant to us how a private company in which we have sold our shares is managed," said one fund manager.

Relations between Mr Loane and Mr Lynch are understood to have become strained in the past few weeks, and market sources believe that whichever of the two directors is the loser in the battle for control of Adare will almost certainly have to quit the company.

When the approach from the Lynch management group was first made public in late March, Adare shares surged more than 25 per cent to a high of €9.10. Since then, however, the shares have dropped back sharply and are trading at €7.75, valuing the company at €118 million (£93 million). But market sources believe that given the sort of premium over market price paid by the Clondalkin management group in its MBO, any successful bid will probably have to be pitched above €10 where Adare would be valued at more than €150 million.