The proposed management buyout (MBO) of Adare Printing is close to collapse after the non-executive directors of Adare and the MBO group failed to agree on a valuation for the print and packaging group.
Adare finance director Mr Peter Lynch, who is heading the MBO group, would not comment when contacted by The Irish Times.
But sources close to the company said the gap between what the MBO group was willing to pay and what the non-executive directors believed Adare was worth "doesn't look like it's going to be bridged".
Meanwhile, a source close to the MBO group insisted the buyout proposal was "alive and kicking".
Adare first revealed at the end of March that it had received an approach from members of the management and that non-executive directors Mr Denis Bergin and Mr James Osborne had been appointed to a committee to consider any proposal that might emerge.
Mr Lynch relocated to the offices of solicitors William Fry for the duration of the negotiations - a standard procedure in these situations.
The announcement that Adare might be taken private drove the shares up from €6.73 at the end of March to a high of €9.10 in mid-April valuing the company at €138 million (£109 million).
Since then, the shares have fallen back in small volumes and were 20 cents lower yesterday on €8.60, making the company worth €130 million. Market sources suggested yesterday that the fact that six weeks has passed since the initial announcement without anything emerging from the management group indicated there were problems over a valuation for Adare that the non-executive directors might be able to recommend to shareholders.
It is understood that, while institutional shareholders were not asked specifically for a price they would accept, some institutions made it clear that they wanted a premium price for a company which, while small, is well-managed and enjoyed a high reputation.
That high reputation, however, did not prevent Adare from suffering in the market antipathy towards small-cap companies and the shares are a long way off their €13.33 high of two years ago.
