IAWS Co-op continues discussions with SWS owners in takeover deal

IAWS Co-op is continuing discussions with the owners of South Western Services (SEWS), a spokesman for IAWS said last night.

He refused to comment on why the co-op pulled out of the consortium biding to buy NTL.

IAWS was part of the Setanta Sports consortium bidding for NTL Ireland, but it severed its connection with the group on Monday night. Final bids had to be submitted yesterday.

IAWS was aligned with a US merchant bank specialising in media, Veronis Suhler Stevenson, and US insurance firm AIG. Setanta Sports refused to comment on the withdrawal of the IAWS co-op. European cable giant UGC and a consortium led by veteran cable entrepreneur John Riordan will also submit bids for the firm, which has 347,000 customers in Dublin, Galway and Waterford.

IAWS still has an 11% stake in IAWS Plc. Apart from that, there is no direct link, other than Philip Lynch, who is chairman of the plc and chief executive of the co-op. He resigned as chief executive of IAWS Plc in late 2003, but remains an active chairman in the lifestyle food group.

Strategically, there is no connection between the two groups and they are independent of each other. IAWS, in the meantime, is focusing its attention on trying to finalise a deal with the owners of SWS to take over the business.

That deal was due for completion on March 9.

Further talks, after some disagreement over some details of the buyout package, pushed the deadline further out.

Last night, a spokesman for IAWS said “discussions are still ongoing”. But, as reported on Tuesday, some question marks have been raised about certain projects underway at SWS and their delivery deadlines.

It was claimed the delays on the delivery in the case of one of the wind farms under construction could reduce the price of €50m plus on the table from Mr Lynch to buy out the five co-ops that own the SWS business. They are Dairygold and the four west Cork societies, including Drinagh and Barryroe.

It was claimed also that earnings projections may have been mistakenly overstated which, if correct, could affect the material value of SWS.

Senior SWS management have categorically denied those claims. By yesterday evening another deadline had passed, raising concerns about the final outcome.

The west Cork co-ops are believed to favour a takeover by Mr Lynch.

SWS management have rejected suggestions they are trying to get the four to put up funding to allow the group to stay independent of IAWS Co-op.