UNILEVER Ireland is to offer £97.5 million to buy 56 per cent of the Irish tea market with its bid for Lyons Irish Holdings.
The Irish subsidiary of the AngloDutch multi national has agreed to buy 75 per cent of LyonsIrish Holdings from Allied Domecq for just over £73 million. Unilever plans to offer 325p per share to holders of the remaining 25 per cent of the tea and doughnuts company, if its £73 million cash offer gets regulatory approval.
Unilever Ireland is not interested in retaining the Lyons quotation on the Irish stock market, according to chairman, Mr Jim Rice But last night, market sources contended that Unilever may have to offer more than 325p to take over the shares of the minority shareholders.
Lyons shares traded up to 420p early last year at the height of the bid fever. But the shares slid back through the year to end 1995 at 340p. The shares last traded this week at 330p.
The agreement between Unilever and Allied Domecq follows months of speculation on the ownership of, Lyons, since the British drinks, group put its 75 per cent stake on, the market. The Irish distribution company, Allegro, was a strong contender for Lyons while agri business group, IAWS, was also interested at one stage.
Unilever has agreed to pay £73.125 million in cash for, 22.5 million Lyons shares. At 325p per share, the offer values Lyons at £97.5 million and the price is about 13.8 times historic earnings and around 10 times earnings when Lyons cash holdings are stripped out.
The largest manufacturer and distributor of tea bags and packet tea in the Irish market, Lyons had net assets of £52.4 million on August 19th 1995. Its assets included cash and bonds of £47 million.
Unilever Ireland chairman, Mr Jim Rice, said his company was paying "a fair price" for Lyons. The price reflected Lyons's strong position in a mature market - Lyons had 56 per cent of the Irish tea market, he said.
Unilever had no plans to make management changes at Lyons, he said. "The company has very good management, producing outstanding results.
On the scope for synergies with Unilever's existing businesses, which include Van den Bergh Foods, he said: "As we learn more about the business, we will examine all our operations to see how best to operate them." There were possible, synergies in the administration and van sales and distribution areas, he said.
Unilever has a turnover of about £200 million in the Irish market and employs 1,000 people producing, marketing and distributing foods, detergents and personal products. Van den Bergh Foods includes HB ice cream, McDonnell soups and spreads, Lipton tea and Colman's mustards and sauces. Other group companies include Lever Brothers, Elida, Quest International and National Adhesives.
On the planned offer to the minority shareholders Mr Rice said: "It would be our preference to own 100 per cent but we would have no problem living with minority shareholders of some want to hold on to their shares."
Lyons chairman and chief executive, Mr Pierce Butler, was not available for comment yesterday. In a statement, the board of Lyons commented: "It may be some time before the agreement between Allied Domecq and Unilever is finally completed" because of the conditions involved which include the approval of the regulatory authorities.
It undertook to advise the minority shareholders "of any developments", but made no comment on the 325p share price.
Under the terms of the deal, the price will be decreased by any dividend payments made by Lyons before completion and increased at an interest rate equivalent to 4 per cent a year for the period until completion. Unilever will also pay £3.7 million for Lyons Irish Enterprises.
