The chief executive of household products group IWP, Mr Joe Moran, has bought a further £1.9 million (€2.4 million) shares in the company. His stake has now risen to 7.8 per cent.

Mr Moran has disclosed that he bought 1.5 million shares on Wednesday at €1.60 each, the third time in two years that the chief executive has bought substantial amounts of IWP stock - at a total personal cost of £8.6 million.

Mr Moran's continued willingness to buy what he believes are undervalued shares will inevitable rekindle speculation that he may take the company private or lead a management buyout (MBO).

Other directors also bought substantial amounts of IWP stock last year, while the company itself has also actively been buying its own shares and bought another 889,694 shares on Wednesday to bring its total purchases in the past year to 3.76 million shares or 4.8 per cent.

IWP has suffered more than most from the antipathy towards small and medium-capitalisation stocks among institutional investors, who are increasingly focused on large euro-zone investments.

When Mr Moran and other directors bought almost 5 per cent on IWP in February last year, the chief executive said a management buyout was a possibility. Since then, however, the management seems to have gone cold on the idea of a buyout, preferring to have the company buy its own shares and sell off a number of non-core businesses.

Mr Moran's latest buying will undoubtedly lead to renewed speculation that he has some plans. At current levels, IWP is valued at €130 million (£104 million), but any MBO would have to be at a significantly higher value to win the support of institutional shareholders.

One factor that may militate against a MBO is the size of the group's debt. At the end of last March, the group had net debt of €166 million and gearing of almost 200 per cent, with interest charges covered just 3.2 times by operating profits.