A NUMBER of potential purchasers are expected to complete due diligence examinations of Woodchester Investments by the end of the month and the hoard will then enter into final negotiations for the sale of the company, according to the chairman and chief executive, Mr Craig McKinney.
The identity of the purchaser should he announced in early June, he said after the company's annual general meeting in Dublin yesterday. But stating he did not want to "be tied to a date", he said the board and its advisers would "take time to do the process the best way".
He refused to be drawn on the number of parties engaged in due diligence or the premium on the share price being sought by the hoard, citing stock exchange rules. But he said potential buyers came from Britain, US and continental Europe and because Woodchester was a very focused financial services company it had attracted buyers from the same business area.
Speculation has centred on GE Capital, AT&T Capital Corporation and Lombard North Central/NatWest Group as the most likely potential buyers of the company which has interests in Britain, Portugal and Denmark as well as its operations in the domestic market. Industry sources said there were three to four buyers in the final lineup.
Announcing a £12.6 million acquisition in Portugal, Mr McKinney told shareholders that new business volumes in the first four months of the year were 30 per cent ahead of 1996 levels. With strong economic environments in all of its markets, group nonperforming loans fell to 2.3 per cent of total loans at the end of April from 2.5 per cent at the end of December, 1996.
The outlook in all Woodchester's operating markets remained favourable, he told shareholders. The acquisition of the two Vendal finance companies of the Santogal motor distributing and retailing group would increase Woodchester's new business in Portugal by about 35 per cent, he said. The finance companies have portfolios of £55 million.
More important than the size of the existing portfolios was the "deal flow" potential they added, Mr McKinney said. Woodchester has got the long term right of first refusal on the retail finance opportunities generated by Santogal's own outlets and the marques it imports.
Based in Lisbon, Santogal which has 15 owned outlets, imports Honda, Alfa Romeo and Daewoo marques and is a leading retailer of Volkswagen, Audi, Mazda and Peugeot.
With the potential benefit from the expansion in Portugal, strong operating results so far this year and a healthy outlook in all its markets, the Woodchester board is likely to look for a premium on the current share price of 285p. Some analysts were forecasting a sale price of around 300p per share which would mean an offer of just under £650 million.
Speaking after the last annual general meeting of the company Mr McKinney said the board was "very pleased with the strong level of interest" shown when indicative offers were sought. The interest was "well up to our best expectations", he said.
Mr McKinney said he would like to remain with the business after it was taken over. "I would like to think that I could serve some useful function, that they would find something fob me," he quipped.
Inviting sharholders to join the board for refreshments after the 20minute meeting, Mr McKinney said he would not appreciate any jibes about the last supper - "it is lunchtime after all," he said.
