The Irish Takeover Panel has censured the Philip Lynch-led Moonduster consortium for breaching takeover rules when buying shares in Irish Continental Group (ICG).
The panel said the share purchase broke Rule 16, as it involved an arrangement on favourable terms that could not be extended to all ICG shareholders.
On September 21st, Moonduster purchased 500,793 shares from the New York-based Octavian Master Fund and the Octavian Special Master Fund.
Moonduster agreed to pay €25.20 a share in cash to Octavian and a top-up payment if the shares were sold on by the consortium at a higher price or if Moonduster paid a higher price for ICG shares over an 18-month period.
The details of the share purchase were not notified to the market until October 1st. In the interim period, Moonduster had bought additional shares at up to €25.40 each. The vendors of these shares would not have been aware of the top-up arrangement agreed with Octavian, as required by takeover rules.
The takeover panel has prohibited Moonduster from paying the top-up consideration it agreed with Octavian.
It is not clear if Octavian will now take action against Moonduster to seek compensation for its failure to deliver on the top-up arrangement.
Calls to the New York-based fund manager were not returned.
Moonduster declined to comment. Moonduster comprises One51 Capital and the Cork-based Doyle shipping group. It has been involved in a protracted takeover battle for ICG with Aella, a management buyout group led by the ferry company's chief executive Eamonn Rothwell.
Moonduster offered €22 a share for ICG in June but this bid was trumped by Aella, which made an offer of €24 a share. Aella's bid was subsequently rejected by shareholders.
In addition, property developer Liam Carroll has built a stake of more than 26 per cent, buying shares at up to €25.75 apiece. Mr Carroll has not lodged a bid for ICG.
ICG is still considered to be in an offer period with Moonduster.
The company's independent directors have indicated that they will press the consortium to make a bid of €25.40 a share, the highest amount that Moonduster has paid for ICG stock. The independent directors are expected to make contact with Moonduster next week to pursue the matter.
