Desmond increases Barlo stake

Investor Mr Dermot Desmond has once again raised his stake in management buyout (MBO) target Barlo, the Irish Stock Exchange revealed yesterday.

Another 1.325 million shares in the combined radiators and plastics group were traded yesterday, sparking speculation that Mr Desmond was again the purchaser of the stake. The shares sold for 42 cent, two cents more than the MBO offer of 40 cents.

Mr Desmond bought 240,028 shares on Thursday for 42 cents each. The purchase brought his stake in the company to 14.24 per cent. If he was behind yesterday's trade, that would increase his stake to 15 per cent.

His associate, Mr Michael Walsh, has more than 0.5 per cent of the company.

Mr Desmond has been buying shares in Barlo through his companies, IIU Nominees and Bottin Investments, since the group revealed details of the MBO offer on February 11th. Before that, he held 4.9 per cent of the company.

Most of his purchases have been made at more than the 40 cents a share offered by the bid. He needs 20 per cent to prevent the offer becoming unconditional and halting the sale.

Barlo chief executive Dr Tony Mullins is the principal of MBO vehicle Melgan. His supporters include deputy chairman Mr Aidan Barlow and members of his family. Mr Carl McCann, chairman of Fyffes, confirmed to The Irish Times this week that he and members of his family are backing the bid.

Melgan plans to raise €200 million to cover the cash offer for the shares, the group's debts of €123.6 million and the bid's associated costs. The offer depends on a simultaneous de-merger of Barlo subsidiary Athlone Extrusions. That company's management, including chief executive Mr Jimmy McGee, will buy it for €68 million.

Barlo will hold an extraordinary general meeting on March 24th to get shareholder approval for the de-merger and management participation in the bid.