The Arnotts board has supported a two-week extension of the Irish Takeover Panel deadline for Carrgran to make a firm offer for the company. The extension, to January 31st, was announced by the panel yesterday and will give the Arnotts board time to consider the latest offer from Carrgran.
Carrgran made an indicative offer of €12.75 for the company on Thursday, subject to due diligence and the recommendation of the Arnotts board. The offer values the retailer at nearly €227 million.
Arnotts said last night that this was the fifth approach it had received from Carrgran. Because it was received just one day before the expiration of the deadline, the board had supported the extension request to allow it to consider the latest approach.
A spokesman for Carrgran, which has the financial backing of US investment house Lehman Brothers, said last night that it was looking forward to presenting its proposal to the Arnotts board.
However, it is understood that, while the board will consider the latest approach, it has not undertaken to meet Carrgran.
The Arnotts board, led by its chairman Mr Michael O'Connor, has to decide whether the offer places an adequate value on the retail group, which owns Ireland's largest department store. It previously rejected offers from Carrgran at €11.50 and €11.80 per share, saying they failed to reflect the company's value and its future prospects.
The market is divided on what the company is worth. NCB Stockbrokers said yesterday that Carrgran's potential offer undervalues Arnotts, which it says could be worth at least €15 per share given the quality of its retail assets.
Merrion Stockbrokers believes Arnotts is worth around €13 per share, a view supported by one fund manager who felt an offer of €12.75 was a reasonable one.
Meanwhile, Mandate and SIPTU, which represent around 1,000 retail staff at Arnotts, said they would hold an emergency meeting of staff on January 20th to discuss the implications of a possible takeover of the group.
Mandate's Mr John Douglas also noted staff hold around 4 per cent of the company.The Arnotts pension fund also holds 13 per cent of the company and "the staff could have a considerable say in how this shareholding votes on any propositions for the company's future," he said.
Other key shareholders include Fidelity, which owns 9.9 per cent of the company, and Bank of Ireland Asset Management, which has a stake of 9.8 per cent.
Arnotts shares fell back by 65 cents to €11.85 last night.
