An Irish financier based in the Channel Islands has emerged as the backer of the rival bid from Orb Estates to Mr Noel Smyth's offer to take Dunloe Ewart private. Mr Sam Nolan (47) is a director and shareholder in Lynch Talbot, the Jersey-based venture capital company that took over Orb Estates earlier this year.
Mr Nolan featured in the fraud action taken by the liquidator of Money Markets International Stockbrokers against seven former directors earlier this year. He is a past director of Cater Allen Trust Company, an Abbey National subsidiary that was linked to Cater Allen Nominees, one of the companies involved in the alleged fraud.
Mr Tom Kavanagh, the liquidator of MMI had sought to call Mr Nolan to give evidence. Mr Nolan left Cater Allen to join Lynch Talbot in June last year. Orb Estates has offered to match Smyth's 51 cents a share offer to Dunloe-Ewart shareholders, but hopes to top Mr Smyth by offering cash instead of the mix of cash and paper being proposed by the Dublin solicitor. Dunloe Ewart has not informed its shareholders of the bid from Orb Estates as the English group has not yet got its financing in position. The offer is supposed to be 100 per cent underwritten by Bank of Scotland, but Dunloe Ewart was not satisfied that the funds were in place, the sources said.
The Irish Takeover Panel was informed about the approach but the advisers to Dunloe Ewart told the board that an announcement was not necessary because the funds were not in place to execute the offer. At 51 cents per share, Dunloe Ewart is valued at €197.6 (£155.6 million).
If Orb Estates can put its finances in place over the next few days it could disrupt Mr Smyth's plans to seek shareholder approval for his proposal at a general meeting on Wednesday.
A number of the large institutional shareholders in Dunloe Ewart may prefer the all-cash offer rather than having to take the unsecured loan notes which make up 17 cents of the 51 cents bid by Mr Smyth.
Several institutions sold out last week to the property developer, Mr Liam Carroll, who is also likely to be a key figure at this week's meeting. He has already built up a 13 per cent stake by offering cash and is expected to try to buy up more shares today and tomorrow. Mr Nolan could not be contacted yesterday. Lynch Talbot manages $250 million in investments on behalf of a number of high net worth individuals.
It operates four separate funds, one of which, the Euro and UK Property Fund LP, provides equity finance to UK and European property transactions. Lynch Talbot advanced loans to Orb Estates last year in order to finance the acquisition of its rival Gander for £57 million sterling. The loans were converted into shares when Orb Estates proved unable to repay the loans and under Stock Exchange rules Lynch Talbot was required to bid for the rest of the company at 60p sterling, considerably less than its net asset value of 114p sterling.
In the year to June 1999 Orb Estates reported a loss of £373,000 sterling on a turnover of £805,000. The company lost a further £1.3 million on a turnover of £3.5 million in the six months to December 1999.
Mr Peter Catto, the chairman of Orb Estates and Mr Charles Helvert, the finance director, joined the board of Tabsie, the Lynch Talbot subsidiary that was used for the takeover. The shareholders in Lynch Talbot are Mr Nolan (46), Mr Salai Ozturk (63) and their family trusts. Mr Carroll, who owns Zoe Developments, one of Ireland's largest property development companies, has not disclosed his intentions and has not discussed the purchase with Dunloe Ewart.
He has acquired his stake through a company called Vantive Holdings, as Zoe was dissolved by the Companies Office last July. A spokesman for Zoe said this weekend that the company has not traded for some time. There was, he added, some mix-up in the filing of returns but he expected the company to be reinstated today.
