Precinct offer too low, says Jurys

JURYS Doyle has put pressure on potential buyer Precinct Investments to put a firm offer on the table for the hotel chain, it emerged yesterday.

After two days of deliberations by the board, no statement was issued regarding the third unsolicited offer from Precinct that was made on July 13, which upped its outline offer to €16.50 per share, valuing the group at €1.04 billion.

It is understood that the Jurys board does not regard the €16.50 as adequate, given the huge boost to the value of the Ballsbridge property site, which is now estimated to be worth €260 million.

That deal is expected to be confirmed today as time runs out on the Precinct offer.

The Takeover Panel’s deadline for Precinct to come up with a formal bid is due to expire tomorrow. It is understood the Jurys board will not respond to the €16.50 outline offer because they do not see it as a formal bid.

Furthermore, the offer price is regarded as too low in the light of the enhanced property valuations the group is currently enjoying.

As reported yesterday, the board of Jurys is also considering the sale and lease back of two other key sites on Dublin’s southside, including its Montrose and Burlington hotel sites.

Sale and lease back deals on those sites would add more to the group’s value, which the board has agreed is well above the €16.50 on the table from Precinct.

It is expected the deal for the Ballsbridge site will be signed off later today. Builder Sean Dunne is believed to have the edge with an offer of €260m.

That price has not been confirmed but the markets believe Mr Dunne has the edge over his competitors and that a deal is imminent. Last night a spokesman for Jurys referred back to Jurys statement that was issued on July 13 and dealt with the Precinct issue.

Back then the Jurys board said the approach did not constitute a firm intention to make an offer.

It was also subject to a number of pre-conditions and “there can be no certainty that an offer will ultimately be forthcoming”.

As far as the board is concerned after its two-day meeting this week, the property situation changes the whole dynamic of the bid situation.

Even though they considered the offer over Monday and Tuesday, it is believed they want further documentation clearly indicating Precinct’s intention to make a firm offer. Without that the Jurys board feels it is in no way obliged to refer the current offer to shareholders.

In addition, the markets are suggesting the sale of the site for €260m has put it up to Precinct to come back, not just with a higher price, but a firm offer.

IBI Corporate Finance is acting for Jurys, while Deloitte is advising Precinct. Talks between both parties are understood to have taken place.

The shares were unchanged at €15.75 yesterday, suggesting the market expects Precinct to come back in with a fresh move before tomorrow’s deadline.