O'Reilly sells Arcon in discount deal

TONY O'REILLY is to sell off mining company Arcon for a discount price of e48 million and a 14% stake in the Lundin Mining Corporation listed on the Toronto and Stockholm stock exchanges.

It is expected the deal will bring in €31.3m in cash for Mr O'Reilly, who holds 65.17% of Arcon and will give him a personal stake of close to 9% in Lundin, which will take over the massive Galmoy zinc mine in Co Kilkenny when the deal is complete.

The sell-off of the company will remove Arcon from the Irish Stock Exchange and give ordinary shareholders a mixture of cash and shares in the new enlarged Canadian firm.

Arcon was valued at €8.6m in 2002 and yesterday's offer places a €93.6m valuation on the company.

The offer is subject to 80% acceptance by Arcon shareholders but Mr O'Reilly, with a 65.17% stake in Arcon, has already indicated he will accept the terms of the deal. Arcon chairman Tony O'Reilly Jnr is expected to join the board of Lundin when the deal goes through.

The board of Arcon, in a statement, said they anticipate they will recommend the offer to shareholders.

The company said: "An independent committee of the board of Arcon will be established for the purposes of considering the offer if, and when, it is made."

Arcon's long-term stockbroker has been Davy Stockbrokers, yet Davy Corporate Finance Limited has been appointed to: "provide independent financial advice with respect to the offer."

Arcon chief executive officer and chief financial officer Peter Kidney said the "merger" will have no impact on the company's 220 workers.