Riverdeep priced at €2.27

GOODBODY Stockbrokers set a 89% premium on Riverdeep’s closing share price of €1.20 last night as the fair value price of the stock while plans for a management buy-out (MBO) of the company gather pace.

Goodbody analyst Gerry Hennigan set a buy-out target price of €2.27 on the proposed management buy-out by led by chief executive and chairman Barry O’Callaghan.

Riverdeep shares fell by 9% yesterday to a €1.20 closing price after Monday’s 76% surge.

Merrion Stockbrokers Rory Gillen believes the current state of play in the MBO places company management at a significant advantage. “Strange times we live in. The company voluntarily de-lists from the Nasdaq, the most supportive exchange for technology company ratings, sees its share price slide in the midst of an information deficit among investors and promptly announces that its management team may make a bid for the company,” he said in a note to clients last night. Mr Gillen said the company believes criticism of information flows to shareholders is unjustified and has said analysts haven’t done their work and that the company structure has changed.

“This both makes and misses the point. How can you properly undertake this work without the most basic information on acquired companies?” he asked.

Mr Gillen said the question now is how much might management bid for the company? “Despite the sharp rise yesterday, the shares are just 15% ahead of the €1.22 at which the shares were trading early last week (before the mid- week sell off)...In the absence of corroborative financial information, we were prepared only to put hold on the stock at €1.22,” he said.