With the benefit of hindsight, it is hardly surprising that the Doyle and Beatty stakebuilding of recent weeks has culminated in an approach for Jurys Doyle.
The prospect, which is now a reality, must have been high in the mind of developer Sean Dunne as he inched his way up the share register at considerable cost to his wallet. It must have been in his thoughts as he sought corporate finance advice last week, with Davy and then with Niall McFadden of Irish Estates.
Like Davy, he is thought unlikely to step into the breach due to other commitments.
More than any other Jurys shareholder, Mr Dunne now faces a stark choice. On one hand, he can choose to sell his 27.84 per cent stake to the Doyle/Beatty/Nelson consortium at €18.90 and, presumably, secure his €260 million purchase of the Ballsbridge site.
The families could then proceed to an 80 per cent deal and take the company private, and Mr Dunne could build the luxury apartment tower in Dublin 4.
This would allow the consortium to move ahead with its desire to run Jurys as a private hotel company and Mr Dunne would come out of his stake-building extravaganza at a profit.
On the other hand, he could decide he wants more land and could try to sit tight on the firm's shareholder register until such time as the consortium, presuming it is successful, is prepared to sell it to him. This is a risky strategy, since as a minority shareholder faced with an unfriendly majority bloc, Mr Dunne's position would be weak.
It would also be an expensive position, tying up about €300 million in capital before any associated borrowing costs are considered. Furthermore, the chances of a public company getting away with doing a special deal with one shareholder would be slim.
The chances of some accommodation being reached between the various parties do look good. After all, it is in nobody's interests to create a stalemate.
To secure a deal at 50 per cent plus one share, the consortium needs to win support of about 8 per cent of Jurys Doyle shares.
Sources say this will not be a problem, with the group likely to pick up the support from a combination of institutions and private client shareholders. This group is not likely to include developer Liam Carroll, who has an 8.3 per cent stake in Jurys and has so far not declared his intentions. If the consortium can get an 80 per cent approval level, however, Mr Carroll's position will be irrelevant.
Financing a deal would also be cheaper at 80 per cent, since it would allow any bank to secure its loan over property rather than shares. Given that the consortium already has 42 per cent of Jurys, however, it automatically requires less debt backing than other potential bidders might.
Gavin Kelleher at Goodbody noted yesterday that the takeover would require funding of at least €686 million, or €426 million after factoring in the proceeds of the Ballsbridge sale. This level could be reached either by leveraging off the hotel group's balance sheet or by selling off more property, Mr Kelleher suggests.
