Desmond firm increases Barlo stake
The financier’s investment vehicle IIU said yesterday it has acquired 1.04 million shares in Barlo, bringing its total to more than 25 million, or 14.84% of the company.
Mr Desmond paid 42c per share, which is 2ct higher than what Tony Mullins, the Barlo chief executive, is offering to take the company private, indicating that Mr Desmond is seeking a higher offer.
The purchase set the financier back €436,800. He has been buying Barlo shares since Dr Mullins’ bid vehicle Melgan announced its takeover offer in early February.
To block the €70 million MBO Mr Desmond would need 20% of Barlo’s shares as any takeover in Ireland requires the consent of 80% of shareholders.
It has emerged that Melgan has already received the irrevocable backing for its offer from shareholders owning 36% of Barlo’s shares.
While Barlo’s offer is 100% above the share price when Dr Mullins first approached the company last July, some brokers believe the takeover is getting the company on the cheap.
Merrion Stockbrokers said given the improvements that have been made in stripping costs from the company, it could be worth up to 80c per share without any improvement in trading. In the offer document sent to shareholders, Melgan will accept a competing offer of 44c per share, though it is unlikely a competing bid will emerge. If Mr Desmond reaches 20% he could probably extract a higher price from Dr Mullins if he wants to take the company private.
