Despite failing to block Royal Doulton's emergency rights issue, Waterford Wedgwood has taken up its full allocation of shares under the issue to maintain its 21 per cent stake in the British china company.
Royal Doulton disclosed last night that it had received acceptances in respect of 82.5 per cent of the shares on offer. A spokesman for Waterford Wedgwood would not comment but it is understood the Irish group took up its allocation in full.
After Royal Doulton announced plans for the £18.9 million sterling (€30.8 million) rights issue, Waterford Wedgwood increased its stake from 14.9 per cent to 21.1 per cent. This was seen as laying the ground for a rival proposal from the Irish group and this led Royal Doulton to postpone the extraordinary general meeting called to approve the rights issue.
Waterford Wedgwood subsequently offered to buy Royal Doulton's Royal Albert brand for £24 million sterling and to pool the sales and distribution operations of both companies in Australia, Canada, the US and Japan. It also offered to lend £12 million to Royal Doulton at a rate below the British company's existing finance costs for three years, secured by a fixed charge over certain properties and assets.
But when the postponed extraordinary meeting reconvened in mid-March, Waterford Wedgwood's proposal was overwhelmingly rejected by Royal Doulton shareholders in line with a board recommendation.
Although Waterford Wedgwood voted its 21 per cent stake against the rights issue, almost 87 per cent of Royal Doulton shareholders voted in favour of the fundraising, indicating that virtually every shareholder apart from Waterford Wedgwood backed the board. Once the rights issue was approved, Waterford Wedgwood then had to decide whether to invest £4 million to maintain its 21 per cent stake, or else see its stake diluted to just 5 per cent as a result of the three-for-one rights issue.
Waterford's decision to maintain its stake will inevitably lead to speculation that, at some stage in the future, it will revive its plans to get its hands on some of Royal Doulton's brands, if not bid for the entire company.