TWO takeovers almost completed in the space of a week something of a novelty for the Irish stock market where takeovers are rather a rare occurrence. DCC now seems set to win control of Flogas (and its cash pile) while the Crean takeover of Inishtech also seems likely to succeed. Both, however, have raised a number of questions.
In the case of Flogas, it is still not clear why DCC decided to go into the market for Flogas shares and then announce plans to bid for the remaining minority shares without consulting the Flogas independent directors in advance.
Nothing specific was said, but it is thought that the independent directors were less than pleased by the tactics of DCC and particularly by what they felt was an opportunistic move to take control of the LPG company.
DCC, for its part, painted itself into a corner with its statement that its bid would not be increased under any circumstances The result was a two day stand off before DCC eventually agreed with the independent directors' proposal to pay a special (and very large) interim dividend which made DCC's bid for the minorities £2.5 million more expensive.
In this case, the four independent directors have emerged from this tussle with reputations enhanced. All of the shareholders on the register before DCC's dawn raid on Flogas will benefit from their determination to secure what they felt was an adequate price for the company.
The Crean takeout of the Inishtech minorities now seems to be a foregone conclusion, but once again the question has to be asked why did Ray McLoughlin not try and get his 550p a share bid far the minorities recommended by the Inishtech board ahead of announcing the bid?
All that has resulted has been a long drawn out squabble between Crean and the Inishtech independent directors and increasingly strained relationships' between Crean and the three executives Brian Molloy, peter Wynne and Philip Soden who left Crean for Inishtech ahead of the bid being announced.
The takeover of the minorities' will cost £26 million and Crean shareholders have made it plain, they expect Inishtech to be sold on "post haste,".
Selling in Inishtech for a reasonable price will be no easy task. Crean will be seen as a forced seller and buyers Clondalkin and Wace are still seen as front runners can afford to bide their time.
"Buyers can afford to let Crean sweat", was how one market source described it. Certainly, if Crean has bought but not sold on Inishtech by the time its June a.g.m. comes, Ray McLoughlin will face some serious questions from his shareholders,
It may only be £6.8 million worth, but the bid by Greencore for Williams Group has been well received whatever reservations there may be about monopolies in the malt market.
Year two should see £1 million added and a penny a share added, to Greencore profits and earnings, if the deal goes ahead.
