Pressure is mounting on Dr Tony Mullins to raise his offer for Barlo yesterday as another 1.3 per cent of the company changed hands at a level above the offer price.

The shares, the bulk of which traded at the very end of the day, were purchased at 42 cents, two cents above the €70 million management buyout (MBO) offer being led by Dr Mullins.

The buyer was not identified but market sources believe it was Mr Dermot Desmond, whose stake in Barlo stood at 17.9 per cent before the trade took place.

If Mr Desmond was the purchaser, his stake will since have climbed to 19.2 per cent.

This would leave him just 0.8 per cent shy of the level he would need to be certain of blocking the Melgan buyout without the help of other shareholders.

Even if his holding did not rise further, the chances of the MBO vehicle, Melgan, achieving success without raising its offer are extremely slim.

Melgan did not comment on the matter yesterday.

Shareholders are due to vote on the MBO bid at an extraordinary general meeting on March 24th. It is unclear at this stage how this meeting would be affected by a decision to change the existing offer.

Mr Desmond has spent some €7 million on building his stake in Barlo since Dr Mullins tabled his firm offer at the start of February.

The bulk of his purchases were made at 42 cents - two cents above the MBO offer.

Some analysts believe the firm could be worth up to 55 cents per share, although Melgan has rejected this.

A statement from Melgan confirmed yesterday that UK investment house Gartmore had sold its entire 3 per cent holding in the company on Wednesday. Mr Desmond was the purchaser.

Melgan still has irrevocable acceptances for its offer in respect of 36 per cent of Barlo shares.

Barlo closed at 42 cents last night, down one cent.