Shares in Greencore gained 5 per cent yesterday on reports that the owners of Icelandic investment firm Exista had amassed some 8 per cent of the food company.
Exista declined to comment when asked yesterday about reports linking brothers Lydur and Agust Gudmundson to an investment in Greencore. The reports also suggested that an Exista board member and real estate investor, Robert Tchenguiz, had bought a 10 per cent stake in the business.
"The story is speculation and our policy is never to comment on speculation like this," said a spokesman for Exista.
There was no comment from Greencore, which has not issued any stock-market notification about any shareholding in the Gudmundsons' name or in that of Mr Tchenguiz.
While the Iseq index of Irish shares declined yesterday, Greencore shares gained 20 cent to close last night at €4.20. The stock rose to €4.25 when trading opened. Its performance yesterday followed a gain of 27 cent on Friday.
Greencore, which holds its agm on Thursday, has been the subject of takeover speculation since developer Liam Carroll acquired 21.57 per cent of the company from financier Dermot Desmond in July 2006.
Mr Carroll now owns some 29.9 per cent of Greencore, the maximum allowable before he is obliged to make an outright bid. He is widely presumed to have designs on Greencore's large land interests in Mallow and Carlow, the sites of its former sugar factories.
This opens up the possibility of carve-up of Greencore between Mr Carroll and Exista, which has significant food interests. Greencore's sandwich-making operations in Britain are seen to have potential to combine with food group Bakkavör, in which Exista has a 40 per cent stake. Bakkavör owns Geest, a major convenience food-maker.
The Gudmundson brothers are believed to have accumulated their interest in the company through contracts for difference, a derivative instrument that enables investors to take a position on a stock - and its likely performance - without actually owning the shares.
It is not known whether they or Mr Carroll have any interest in developing a joint bid for the company on the basis that they would separate its property and food interests once the deal was done.
Another possibility is that the Gudmundsons and Mr Tchenguiz, if reports about his stake-building are true, would mount a joint bid for Greencore in opposition to Mr Carroll.
Greencore's sites are in Mallow and Carlow are the subject of redevelopment plans, although they are still at planning stage. While a local authority master plan for Carlow allows its sites to be redeveloped, the property has yet to be rezoned.
The process of redeveloping the Mallow site is at a more advanced stage, although planning approval is still awaited.
