One51, Doyle Group offer for firm likely to lead to takeover battle

ONE 51 and the Cork- based Doyle Group’s indicative offer of over €500 million for Irish Continental Group (ICG) has cleared up any confusion about its intentions.

If after due diligence they are satisfied with the company’s books, they said in a statement to the takeover panel yesterday that they were likely to make an offer above €20 per share.

While the statement leaves them an out if they choose not to bid, it is clear that the management have a takeover battle on their hands and will have to dig deeper if they want to keep their chances alive of buying out the company.

The management buyout (MBO) from chief executive Eamonn Rothwell and the senior management team offered €18.50 for the shares, valuing the company at €470m.

Since then however the shares have never fallen below €19 a share as the market made it clear they were not about to accept Mr Rothwell’s initial offer, or were convinced a counter offer was about to emerge.

It was also the case that with One51 holding a 5.6% equity stake in ICG and the Doyle Group having snapped holding 3%, the figures no longer added up for the MBO.

Hedge funds had also snapped up roughly 20% of the stock and combined they hold over 25% of the equity, enough to make the required 75% acceptance impossible for Mr Rothwell and his colleagues when shareholders vote on April 12.

Some analysts found it hard to understand Philip Lynch’s interest in ICG, given his stated intentions of wanting to float One51 in its own right.

There were question marks too about his €120m investment in NTR which is now worth close to €400m, and involved One51 having a 26% stake in the wind energy and waste management group.

Some brokers thought that Mr Lynch was doing exactly what he had done in NTR and was simply taking a key stake that would grow significantly over time.

However one unidentified broker warned that it would be wrong to underestimate Mr Lynch and it looks as if he has confounded market watchers again with this latest move.

So too have the Doyle Group which is jointly run by cousins Frank and Conor Doyle.

Its land bank includes Verolme, the former dockyard site, strategically located in Cork harbour.

Its land in Cork alone is worth an estimated €250m and though low profile, they are substantial players in both shipping and property.

By contrast Philip Lynch has been more in the public eye since resigning his to job as boss of IAWS.

Most watchers of One51 were expecting his next move would be to float the former co-op.

His joint pitch with the Doyle Group looks to have put that ambition on the back burner.