Dublin businessman Mr Austin Conboy has continued to build a sizeable stake in Capital Bars, the pubs and clubs group that is the focus of a recommended takeover bid by the O'Dwyer brothers, Liam and Des.

Mr Conboy bought another 650,000 Capital shares at 251/2p sterling each on Christmas Eve and this takes his stake in the group to 7.84 per cent.

Capital shares continued to trade in size in London yesterday with turnover of more than one million shares. Market sources suggested Mr Conboy was the most likely buyer in yesterday's market and it is conceivable his stake will reach 10 per cent by today's first closing of the O'Dwyer offer. So far, Mr Conboy has spent £630,000 sterling (€1 million) on Capital Bars shares at prices of 241/2p and 251/2p sterling. This compares with the 21p sterling recommended offer by the O'Dwyers for the 56 per cent of Capital they do not already own. The O'Dwyer offer values Capital Bars at £7 million (€11 million) and has been recommended by Capital's independent directors.

Mr Conboy could not be contacted yesterday, but he previously told The Irish Times he intended to buy up to 25 per cent of the company on the open market. The O'Dwyer brothers can only stand on the sidelines and monitor his activities as they are prevented, under Stock Exchange takeover rules, from purchasing Capital shares on the open market at above their 21p sterling offer price.

Capital shares have been trading at 10 per cent or more above their offer price for some time.