Directors of the Northern Ireland pharmaceuticals group Galen have sold about £30 million sterling (€49.3 million) worth of shares to Irish and British institutions in an effort to improve liquidity in Galen shares, market sources have told The Irish Times.
The sale of the shares is expected to be announced to the Stock Exchange on Monday.
It is understood that the shares were placed with institutional investors in Dublin and London by ABN Amro at around £8.80 sterling a share - meaning that the shares were sold at a negligible discount to the overnight price.
The price suggests that about 3.5 million shares were sold by the directors - about 2 per cent of the total.
Galen shares have risen strongly since the middle of the year after the group bought the Dublinbased but Nasdaq-listed pharmaceuticals group Warner Chilcott for £260 million worth of Galen shares.
But despite the additional shares in issue following that takeover, institutional investors have found it difficult to buy Galen shares in any size. This was because of the amount of shares held by Galen founder and former chairman Dr Allen McClay, current chairman Dr John King and finance director Mr Geoffrey Elliott. Prior to yesterday's placing, Dr McClay owned 25 per of Galen shares, Dr King owned 13.6 per cent while Mr Elliott owned 4 per cent.
In addition, Galen employees owned 3.1 per cent through an ESOP (employee share option plan) while Elan Corporation owned 3.8 per cent.
This meant that, in effect, less than half of Galen's shares were free-floating with the result that potential investors in the stock found it difficult to buy in size.
It is understood the shares sold yesterday were evenly divided between Irish and British institutions. Although Galen has yet to disclose how many shares were sold by each director, it is thought, however, that the bulk of the shares were sold by Dr McClay, who has retired from active involvement with the group.
This is the second time in the space of a year that Galen directors have sold shares.
In November last year, directors and associated parties sold £43 million worth of shares in a move taken at the behest of institutional investors who wanted additional liquidity in the shares.
A bachelor in his 60s, Dr McClay's remaining stake in Galen is worth almost £300 million sterling, making him one of the wealthiest people in Northern Ireland.
When Galen floated on the stock market almost four years ago, he gave Galen employees £7 million worth of shares and gave another £17 million to Queens University Belfast. At the time, he commented: "There's no pocket in a shroud."
