The Sherry FitzGerald management buyout (MBO), led by chief executive Mr Mark FitzGerald, seemed assured of success yesterday after investors holding more than 80 per cent of the shares committed themselves to accept the offer.
Renlin, the management team's bid vehicle, formally tabled its €1.95 per share offer for the property group yesterday afternoon, only to announce a little over an hour later that it had received irrevocable acceptances from shareholders representing 81.2 per cent of the shares to which the offer relates.
This leaves Renlin in a position to compulsorily acquire the outstanding shares.
The offer, which has been recommended by the independent directors of Sherry FitzGerald, values the company at around €25.8 million.
Although it is slightly below the €1.99 share price at which Sherry FitzGerald floated four years ago, the offer represents a premium of 60 per cent to the company's share price of €1.22 before the bid was announced.
The management buyout is being financed through a combination of €24 million in debt, which is being made available by Anglo Irish Bank, and a €2 million investment by two businessmen, Mr Pat Ridge and Mr Walter Coakley, in Renlin.
Mr Ridge, a chartered accountants, is the chairman of Bord Iascaigh Mhara and a former Green Isle Food Group director. He will become non-executive chairman of the private company.
Mr Coakley, a former AIB executive, will join Renlin as a full-time executive, taking up the role of managing director of Sherry FitzGerald Capital.
Meanwhile, Mr FitzGerald, and the eight other members of the management team that make up Renlin, intend to remain in place to operate the business. Renlin said it intends to continue to develop the company's existing business units.
Another executive director, Mr James Meagher will remain with the company but is not part of the management buyout team.
However, along with the management team, he has pledged to accept the offer in respect of his shareholding as have other shareholders who own around 45 per cent of the company.
Renlin already controls 14.3 per cent of Sherry FitzGerald following the exchange by members of the management team of some of their shares for Renlin shares yesterday.
