Shares in troubled printing group Oakhill soared yesterday after the Dublin-based company announced plans to bring former Eircom finance director Peter Lynch on board as executive chairman to prepare the group for significant expansion. Claire Shoesmithreports.
In a statement to the Irish Stock Exchange, Oakhill admitted it had struggled to "keep pace with the rate of change" and, as a result, had failed to achieve the desired levels of profit growth.
The statement said that, following a review of the business, the company had decided that its future lay in widening the group's range of businesses, a strategy it believed would be more successful with the help of an experienced investor like Mr Lynch.
Oakhill shares jumped 54 per cent to close at 20 cent in Dublin, while in London they were up 64 per cent, at 14.75 pence.
As part of the revamp, which according to the statement will see Mr Lynch develop Oakhill as an acquisition and development capital vehicle, the company has raised €2.1 million through the placing of 14 million shares at 15 cent each - a 15 per cent premium on the closing price of the shares on Wednesday.
As part of the proposals, Mr Lynch subscribed to 4.2 million new shares, which when combined with the allocation of 50 million new warrants, brings his holding to 14.1 million shares, or almost 20 per cent of Oakhill's total issued share capital.
He previously controlled 8.3 per cent of the company and the increase was facilitated by the sale of 5.2 million shares, or 9.2 per cent of the company, by Ray McLoughlin, Oakhill's largest shareholder. Mr McLoughlin retains a 16 per cent stake in the group through a corporate holding.
The proposed changes, which include the resignation of all existing directors and the appointment of John Doris as a non-executive director to work with Mr Lynch, are subject to shareholder approval at an extraordinary general meeting on May 9th.
Mr Lynch declined to say whether he would sell off Oakhill's existing businesses, but admitted that sales as they stand - €16.8 million in the first half of 2006 - were not high enough.
