Croesus/An Investor's View:It's hardly a surprise that Irish Continental Group (ICG) is one of the Irish market's top-performing stocks so far this year.

As a takeover battle heightens at the shipping group, the shares have moved from a price of €15 at the beginning of the year to a situation where they are now trading comfortably over €20.

On the announcement of its 2006 financial results, a management group led by chief executive Eamonn Rothwell announced a cash offer of €18.50 per share. The share price immediately jumped above €19, indicating that investors figured it would take a higher price to secure the company.

As it transpired, Cork-based shipping company the Doyle group, acting with One51 group, bought a stake in ICG and announced that they intended to make an offer of not less than €20 per share for the company.

Since early April the shares have traded comfortably over €20 and on April 16th the independent directors of ICG announced that the Doyle consortium had entered into a formal process with ICG and commenced confirmatory due diligence.

At the time, this was expected to be completed in four weeks. In the meantime the bidding consortium had purchased additional shares at a price of €20.75, which means that their offer price will have to be not less than €20.75.

Disclosures to the Takeover Panel indicate that several parties other than this consortium have built up stakes of over 1 per cent, with some paying as much as €21 in the process. These include Buchanan Holdings with 4.05 per cent, Sandell Asset Management with 5.33 per cent and Greuss Asset Management with 2.56 per cent. Management of ICG itself holds 14.1 per cent of the fully diluted share capital in aggregate.

Interestingly, disclosures to the Irish Stock Exchange show that the bidding consortium has built up its stake through contracts for difference with Cantor Fitzgerald.

The latest disclosure by Cantor stated that they held 18.2 per cent of ICG's share capital (4,303,850 shares), all of which are held to hedge CFD positions for clients. All but 169,444 of these shares are effectively held for One51 and the Doyle group.

In an indication of an increasingly acrimonious stand-off, the consortium said in a statement to the exchange on April 26th that it was having difficulty in getting financial information to enable it to complete due diligence.

One month later, following a subsequent statement from the consortium that due diligence was substantially complete, ICG issued a statement on May 25th stating that in the absence of a firm bid from the consortium, the independent directors had requested the Takeover Panel to impose a deadline for the consortium to clarify its position.

It is surprising it is taking the consortium so long to complete its due diligence. However, shipping companies are difficult to value given the large amount of capital that is tied up in shipping assets and port facilities.

The value of assets, mainly ships, is €470 million, according to ICG's 2006 annual report and there is accumulated depreciation of €199.6 million. There are no fewer than 37 notes to the accounts, some of which are very detailed. It is likely the bidding consortium is digging deeply into the various leases and charter agreements that are in place.

The company's aggregate position on pensions is one of surplus, so it is unlikely this is an area that is slowing down the due diligence process.

For private investors, sitting tight is clearly the best policy, even though the only firm bid on the table at this stage is the management offer of €18.50 per share. At that figure, the downside is therefore limited and it is likely that the company will be taken out at well over €21 per share.

As well as its shipping assets ICG has a 33-acre terminal in Dublin port and an 11.5-acre site on the Antrim side of Belfast port. The company also has secure port agreements in Ireland, Britain and France in respect of its scheduled ferry services. Investors throughout the world have been paying premium prices for such infrastructural assets in recent years.

It could be some time yet before the fate of ICG is settled, but the trading action on the market indicates the battle for control is only just beginning.