Riverdeep shares soar on MBO deal

Shares in Riverdeep soared by up to 20% today after the Irish educational software publisher agreed to a management buy out which values its business at $376.3m (€353m).

The offer from Hertal Acquisitions, a company controlled by Riverdeep’s chairman and chief executive Barry O’Callaghan and non-executive director and founder Patrick McDonagh, has been recommended to shareholders by independent directors.

Since de-listing from US technology-dominated exchange Nasdaq last October, Riverdeep has a primary listing on the Iseq and its stock is quoted in euros.

But with the company’s main operations in the US, the funding for Hertal’s bid has been raised in US dollars.

The offer values Riverdeep at $1.51 (€1.41) a share. Hertal has reserved the right to raise the offer up to $1.66 (€1.56) in cash for each Riverdeep share.

Mr O’Callaghan and Mr McDonagh have unconditionally agreed with Riverdeep to stand aside if any competing offer of at least $1.67 (€1.57) a share is tabled.

If today’s offer is accepted, Alchemy Partners of Guernsey is expected to hold 22.9% of Hertal’s fully diluted equity share capital. Mr O’Callaghan would hold 21.2% and Mr McDonagh 21.2%.

Shares in Riverdeep rose 20% to €1.39 on the Irish Stock Exchange following the announcement.