The Doyle family yesterday took control of Jurys Doyle Hotels after paying close to €50 million for part of a key shareholder's stake in the company.
The deal signalled that the group is entering the final stage of a five-month takeover battle. However, its second biggest shareholder, developer Seán Dunne, who has 28 per cent of the company, argued last night that it was still open to him to bid for the group.
Yesterday property developer, Liam Carroll sold 2.64 million shares, half his 8.3 per cent stake, for €49.9 million to the Doyle vehicle, JDH Acquisitions. And he has given an irrevocable commitment to sell the remaining 2.64 million to the Doyles, giving them control of his holding.
Jurys will release details of both agreements this morning.
Mr Carroll will make an estimated €30 million profit from the sale of his entire 8.3 per cent stake in the group. He paid between €17.85 and €18 for his shares, and market sources calculate his total outlay at €70 million.
Yesterday's sale gives JDH around 52 per cent of the company, while it will have close to 56 per cent once Mr Carroll delivers on his commitment to sell the rest of his shares.
However, Mr Dunne's spokes- man last night said the latest development changed nothing. He has been building a stake in the company and has agreed to buy a five-acre site in Ballsbridge, Dublin, from the group for €260 million.
"While this gives them [ the Doyles] control of the board, it does not allow them to forcibly acquire shares or to take the company private," Mr Dunne's spokesman said.
"He has the luxury of being able to sit and wait indefinitely. He can retain his shareholding, he can sell it or he can make a bid. All of these options are still open to him." He has had talks with Canadian finance house Orion about financing a bid.
Mr Dunne has also hired former Investment Bank of Ireland chief, Richard Keatinge, as a corporate adviser. JDH will need 80 per cent of the company before its bid, which values the company at €1.25 billion, has to be automatically accepted by its remaining shareholders.
This would also allow it to borrow money against the group's assets. Mr Dunne can prevent the Doyles from reaching this level. One source suggested yesterday that as a possible compromise, the group could dispose of another property to Mr Dunne. The group's large land bank is understood to be the main motive for the developer's interest in the business. The company has already indicated that it will sell the Berkeley Court and Montrose hotels in Dublin.
However, the stock exchange takeover rules could make such a deal difficult. The company cannot treat one shareholder differently from the others in a takeover situation.
JDH is likely to continue acquiring Jurys stock. It has commitments from its directors that they will sell their options over the group's stock.
This will take effect at the end of the year. That event would have pushed JDH's stake above the 50 per cent mark, without it having to buy Mr Carroll's stake.
The directors' commitments, combined with Mr Carroll's holding, will give JDH over 60 per cent of the company.
JDH will pay him €18.90 a unit for all his shares, which works out at close to €100 million. There was no reason given for his decision to sell the stake in two tranches.
Mr Dunne is due to complete the €260 million purchase of the five acre site at Ballsbridge on Thursday.
He has already paid a deposit for the property. The original deadline for payment of the outstanding balance was last week, but Mr Dunne's lawyers wrote to the company saying he could not pay the money on time. The parties have since agreed a new deadline of next Thursday and Mr Dunne has said he will not miss it.
