The board of Unidare intends to grow the company by acquisition and is not in favour of it being taken into private ownership, the annual general meeting heard yesterday.

The comments follow the recent purchase of a 18.55 per cent stake in Unidare by businessmen Mr Dermot Desmond and Mr Pierce Casey, which led to speculation that Unidare might go private.

The meeting was told that the best option for maximising long-term shareholder value was to "leverage our investments by acquisition".

Chief executive Mr Paul Duggan told reporters afterwards that the board had not been approached by anyone about a buyout, although he admitted the board had examined the privatisation option during a recent "strategic review." He said it was just one of several options examined and that no specific proposal was drawn up.

He said he did not know what "agenda or motivation" was behind the purchases by Mr Casey and Mr Desmond. If they buy more than 20 per cent of Unidare's shares, they would be in a position to block any other bidder.

The meeting also heard that Complex Tooling and Molding, which bought Unidare's subsidiary Southborough in September for £5.1 million, is now pursuing a claim against the company. Complex Tooling and Molding is claiming that Southborough lost business with a major customer after the sale was completed with Unidare.

Chairman Mr Jack Hayes said that, having considered professional advice, the board believed no valid claim existed and that the ultimate cost to the group, if any, "will not be material". Mr Duggan said that, because of this, the company was not making any provision for the claim. As part of the sale of Southborough to Complex Tooling and Molding, some £250,000 of the total consideration was deferred. This sum was the subject of questions from shareholders and Mr Duggan told reporters the sum was now "overdue".

Shareholders were also given a downbeat message on the company's likely performance in 1999. Mr Hayes said the slowdown this year had been "greater than we anticipated". He added that, despite improving its market share, the first half of 1999 would "be further behind last year than we had budgeted". However, he said the second half would be more in line with last year.

Mr Duggan said the company had a clear acquisition strategy, which sought to build on the market share of its subsidiaries Nasco in the US and Daalderop in the Netherlands.

He added that Unidare had made major investments in its back-office operations which meant it could handle customer requests more quickly and efficiently.