It is difficult to come to any conclusion other than that Fitzwilton shareholders are being short-changed with the 50p a share buyout offer from Tony O'Reilly and Peter Goulandris. Given that shareholders are being offered less than the value of Fitzwilton's shareholding in Waterford Wedgwood, they are entitled to more. By any standards, the buyout offer is unfavourable to shareholders.
Regrettably, given the blunt warning that shareholders face a dividend-free future unless they accept the O'Reilly-Goulandris offer, it seems likely that Fitzwilton will depart the market on the cheap unless one of the bigger institutional shareholders decides to be awkward and prevent Fitzwilton getting enough the acceptances to be able to compulsorily acquire any outstanding shares.
Perhaps there is no better person to lead the resistance to Fitzwilton's paltry offer than Dunnes Stores chairman Frank Dunne. If anybody knows value for money it is Frank Dunne, who is thought to have been the prime decision-maker behind Dunnes' decision to buy 10 per cent of Fitzwilton a couple of years ago.
Quite what the reasoning was behind that investment has never been made clear, and Dunnes has never commented on why it decided to take a stake of such magnitude in a company whose main trading business is supermarkets in Northern Ireland. Was it a back door move to bid for Wellworth? Whatever the motivation, Dunnes Stores is sitting on a loss on its Fitzwilton investment and that is a situation that hardly appeals to the masters of cost-consciousness in the Dunnes boardroom.
Under company law, the O'Reilly/ Goulandris group needs to a bit more than is usual to be able to compulsorily acquire outstanding Fitzwilton shares. The buyout group already has 27.6 per cent of Fitzwilton and has to get 75 per cent of the remaining sharheolders by number and 80 per cent by value.
One shareholder blocking a full takeover is not a unique occurrence remember Scottish Provident's John Lawrie standing firm that DCC's bid for Printech was too low. The ScotProv member stood firm and DCC had to accept it.
