The Barlo plastics group will pay almost €56 million (more than £44 million) for Athlone Extrusions. Details of the recommended offer will be revealed when Athlone publishes full-year results tomorrow.

Barlo is expected to offer Athlone shareholders about €1.20 a share, slightly more than the €1.16 price at which the company was floated on the Dublin and London stock markets three years ago. It is understood that Athlone management and its advisers have been holding out for €1.30 a share but the final figure is likely to be in the region of €1.20.

Yesterday, following the report of the bid in The Irish Times, Athlone shares soared 25 cents to €1.10 while Barlo shares were six cents firmer on €0.92. Trading in both was, however, very light.

The main beneficiary from the takeover will be the family of the late managing director, Pat Ryan, who have a 19.5 per cent stake in Athlone, which will be worth €10.9 million at the €1.20 a share price. Managing director Mr James McGee's 10 per cent stake will be worth €5.6 million while other directors and management own about 20 per cent of the company worth around €11 million.

The six directors and nine managers who bought 4.46 million Athlone shares at €0.83 a share in October last year will make a combined profit of €1.6 million on that particular investment. The losers will be former chairman Mr Pat Plunkett and ABN Amro who sold that block of 4.46 million shares.

While the final details of the takeover will not be revealed until tomorrow, analysts in Dublin said it was a logical move with geographical and product synergies. Athlone has a strong presence in the British market while Barlo is strong in continental Europe.

Based on analyst forecasts of earnings per share for Athlone of 11.1 cents for the year to the end of September, Barlo will be buying Athlone on a multiple of almost 11 times earnings. This is seen as reasonable given Athlone's improved performance this year.