In a dramatic move, Dunloe Ewart has decided to cancel the privatisation scheme of arrangement, and tomorrow's meeting, as it enters into takeover discussions with Zoe property developer Mr Liam Carroll, and Jersey-based Orb Estates. It is now building into a takeover battle between the two contenders, unless other parties emerge. But it has not yet received any bids.
The brief announcement came in a day which saw further substantial dealings in Dunloe Ewart shares. Some 19.7 million shares changed hands yesterday, or 5 per cent of the company. The shares closed at 47 cents. Mr Carroll was in the market again yesterday, according to market sources, and his stake has now passed the 15 per cent threshold, which gives him the edge on Orb.
There are now restrictions over what he can buy, however. Under the takeover rules, his purchases will be slowed as his vehicle, Vantive Holdings, can only accumulate 9.9 per cent over the next seven days. Some sources suggested Orb was in the market but that could not be confirmed.
The Dunloe Ewart statement said it had "received expressions of interest from parties which may lead to offers for the company. The board also notes movement of significant shareholdings and the acquisition by Vantive Holdings Limited of a 13.59 per cent interest in the firm at prices of up to 48 cents per share".
It said in the light of these movements: "The board has decided, in the interests of shareholders, to inform the High Court of these developments and of the board's intention (subject to the approval of the Court) to cancel the scheme and the meeting of shareholders and option holders convened for Wednesday October 4th, 2000, at which the proposed scheme of arrangement would have been considered."
The firm said it was working with its advisers to see if an offer for shareholders could be secured.
A Dunloe Ewart spokesman told The Irish Times: "This is a good day for the shareholdings. We couldn't get shareholders to invest in a rights issue at 30 cents six months ago. Now we have investors willing to invest at 48 cents."
Merrion Stockbrokers, which is acting on behalf of Mr Carroll, confirmed yesterday that the stake had reached 13.59 per cent last Friday. Buying started two days earlier. But some disquiet has been expressed that the Orb approach two days earlier had not been announced. The non-announcement has been attributed to Orb not been fully financed for the deal.
Observers also questioned the different approach adopted by the Irish Takeover Panel, pointing out that Mr Smyth was allowed to proceed with the privatisation move without the necessary funds in place while this route was denied to Orb. Mr Smyth got a waiver but this was subjected to a number of conditions on the funding. Orb made a complaint yesterday to the Irish Takeover Panel about its treatment. However, following the discussions and the dispatch of a letter to Dunloe Ewart, the matter was resolved. Orb can now make a bid following discussions with the Dunloe Ewart board but it is not known if it has the necessary funding in place. A suggested offer of 51 cent per share was mentioned but the outcome could be in excess of this, particularly as there are now two interested contenders. At 51 cents per share Dunloe Ewart is valued at €197.6 million (£155.6 million).
Dunloe Ewart shares had a net asset backing per share of 67 cents at the end of June. The privatisation offer amounted to 51 cents per share. However, only 34 cents of this was in cash, the remaining 17 cents being in unsecured loan stock, which was not favoured by many shareholders. Had Wednesday's meeting gone ahead, many shareholders were expected to criticise the loan stock offer.
