Better a bit of something than a lot of nothing

The attentions of the Sean Quinn Group may have elevated the spin-off by Ardagh plc of its remaining glass-making businesses from the mundane. But when it came to a vote, shareholders who have seen little return on their investment in recent years were happy to grab hold of any prospect offering better times ahead.

At the very least, through the exit of 30.6 shareholder HgCapital, the remaining shareholders will have a larger stake in the demerged operation than they have within the listed company.

With a cash alternative of just €1.10 on offer, few other shareholders are likely to walk away at this stage, especially with the company now offering to buy back 5 per cent of the remaining shares each year for the next three years at a price of €1.50 or higher.

Shareholders will be further heartened by the company's commitment to facilitate trade in the shares.

As it turned out, the votes of HgCapital, chairman Mr Paul Coulson's Yeoman International and Ardagh executives and directors were more than a match for the 6.6 per cent of Ardagh stock voted against the plan to take Ardagh's international operations away from the glare of a public listing.

And that is good news for Mr Coulson. While no other shareholder will be allowed build up a stake of more than 5 per cent, he holds close to 34 per cent of the private company even with the other shareholders taking up their rights. the buyback of 15 per cent of the stock over the next three years could see that rise to almost 40 per cent.

Mr Coulson made it clear yesterday he has no intention of taking over Ardagh Glass but shareholders remain convinced that he will at least determine its direction over the coming years.

The company has struggled to deliver returns to shareholders in recent years. Bad as stock markets have performed as a whole, Ardagh did worse.

Mr Coulson and the board have blamed the vagaries of the market where small companies complain they have been undervalued - struggling still further as institutions widened their horizons following the introduction of the euro.

Ardagh argued in this proposal that its private status would attract new private equity capital to accelerate its development at a valuation reflecting the fundamentals of the business rather than its market capitalisation. It also asserts it will allow the company to respond more flexibly and rapidly to acquisition opportunities as they arise.

Yesterday, it won the argument; now it has to deliver.