Plans by the O'Dwyer brothers, Liam and Des, to take Dublin pubs group Capital Bars private have hit a setback after a private Dublin investor bought almost 6 per cent of the company at a price above the O'Dwyer brothers' offer.
Dublin businessman Mr Austin Conboy said he intended to buy up to 25 per cent of the company.
The managing director of the Euroshipping transport and shipping group yesterday bought 1.89 million Capital Bars shares at 241/2p sterling each, 3p above the 21p a share recommended offer from the O'Dwyers. That block of shares cost Mr Conboy £463,000 sterling (€746,000).
Speaking to The Irish Times, Mr Conboy described himself as an active stock market investor, and said he is acting solely on his own behalf and not for any third party. "I looked at the company and the finances and I thought it was a worthwhile investment," he said. Before yesterday's move, Mr Conboy held around 100,000 Capital Bars shares.
Mr Conboy added that he intended to continue buying the shares, even against the background of the recommended offer from the O'Dwyers. "I intend to buy up to 25 per cent of the shares," Mr Conboy said. If Mr Conboy does buy this many shares, it will cost him about £2 million sterling (€3.2 million).
He would not comment on the O'Dwyers' offer, but market sources believe Mr Conboy is attempting to force the O'Dwyers to raise the 21p a share offer.
The O'Dwyer brothers already control 44 per cent of Capital Bars shares and the first closing date for the offer is Friday, December 29th. Buying out the shares they do not already own would cost them €11 million (£8.7 million) at the current offer price.
Normally, a recommended offer would be almost guaranteed of success, but Mr Conboy's activity in the market has meant that the bid/offer spread for the shares on the London market is now 23/26p with a mid price of 241/2p - well above the O'Dwyers' offer price. That means they may find it difficult to buy enough of the outstanding shares for their offer to succeed.
Under company law, the O'Dwyers will need to get 90 per cent from Capital Bars shareholders before they can compulsorily buy the remaining shares. With Mr Conboy already controlling almost 6 per cent of Capital and publicly in the market for more shares, the O'Dwyers may find it difficult to reach the crucial 90 per cent acceptance level.
Neither Liam nor Des O'Dwyer could be contacted for comment, but sources close to the bid said their offer was the only one on the table and that Mr Conboy had not made any offer for the shares. "He's taking a gamble that they won't get the 90 per cent because, if they do, they can buy him out at 21p, no matter what he paid for the shares," said the source.
If the O'Dwyers fail to get 90 per cent acceptances by next Friday, they will faced with a difficult choice. They can allow the bid to lapse and allow Capital Bars remain a public company, extend the offer in the hope of getting 90 per cent by a later date, or increase the offer.
Normally, the final few trading days of the year on the market are dead. In Capital Bars' case, the three and half trading days before the end of the year may be crucial to the outcome of the O'Dwyers' offer.
