As long as Dunloe's 3,000 small shareholders can avail of the proposal,Smyth will not oppose it

Mr Noel Smyth has signalled he is willing to accept the proposal from rival shareholders thatDunloe Ewart's surplus cash be used to buy back shares at 50 cents, provided the offer is made available to the firm's small shareholders.

Mr Smyth, who holds more than 26 per cent of Dunloe, is in a position to block the proposal made by Mr Dermot Desmond's IIU, which now owns 15.64 per cent of Dunloe, and Mr Phil Monahan's Monarch Properties, which owns 6.7 per cent. But provided the proposal is "fair and widespread" and Dunloe's 3,000 small shareholders are able to avail of it, Mr Smyth has indicated he will not oppose it.

"If this proposal is executed and is made available to all shareholders unconnected with IIU and Monarch, then Mr Smyth believes the proposal is to be welcomed," according to a statement from Valdot, his investment vehicle.

Meanwhile, the company's independent directors have said they will seek "urgent and detailed clarification" from IIU and Monarch of their proposal.

It is understood that there is only sufficient cash within the company to buy out about 48 per cent of the company's stock.

As of yesterday, this was the amount held by Mr Smyth and the company's 3,000 small shareholders.

Between them, Mr Desmond, Mr Monahan and the company's largest shareholder, Mr Liam Carroll, control 52 per cent.

It is not clear how Mr Carroll views the proposal made by Mr Desmond and Mr Monahan but given that Mr Carroll controls 29.99 per cent of the company, he too is in a position to block the deal.

The independent directors also said that a notice convening the extraordinary meeting requested by Mr Desmond and Mr Monahan would be sent to shareholders in accordance with company law.

The two men, who have accused Mr Smyth of trying to gain control of Dunloe on the cheap, are seeking to remove all of the board members with the exception of the two executive directors, Mr Tim Kenny and Mr Noel Murray.

However, the independent directors defended their record, saying they had "consistently acted bona fide in the best interests of the company and the shareholders as a whole".

Mr Smyth dismissed as "petty the personal attack launched against him by Messrs Dermot Desmond and Phil Monahan".

They said this week that while shareholders had not received any dividend from 1996 to 2001, parties related to Mr Smyth had received around €9 million in payment and fees. But sources close to the company said these matters had been well discussed and had been in the public domain over the years.

More than 3.1 million Dunloe shares traded yesterday with the stock closing one cent higher at €0.44 as Mr Desmond again confirmed that he had upped his stake, to 15.64 per cent from 14.47 per cent.

Meanwhile, Dunloe's joint venture partner in the Cherrywood development, British Land, has said the sale of the site is expected to take place early next year.

British Land said there were potential buyers expressing interest.

When Dunloe was trying to buy out British Land earlier this year, the site was valued at €132.5 million and it is unlikely it will be sold for less than this.