The financier Mr Dermot Desmond and the property developer Mr Phil Monahan are seeking the removal of Mr Noel Smyth as chairman of Dunloe Ewart.
The Dunloe board is to hold a meeting, possibly as early as today, to consider a number of dramatic developments yesterday including a request for an extraordinary general meeting from Mr Desmond and Mr Monahan.
A statement on yesterday's developments may be released by Mr Smyth today. He was not commenting yesterday. It is understood he has made a fresh complaint to the Takeover Panel, alleging that Mr Desmond, Mr Monahan and another significant Dunloe shareholder, property developer Mr Liam Carroll, are acting in concert.
Mr Desmond and Mr Monahan, who are known to have fallen out with Mr Smyth some time ago, have separately built up a combined shareholding in Dunloe that grants them the right to requisition an e.g.m. As well as the removal of Mr Smyth, the two are also seeking the removal of the rest of the board of Dunloe apart from the two executive directors, Mr Tim Kenny and Mr Noel Murray.
They want to appoint five new directors, including Mr Monahan, use existing surplus cash to buy back shares at 50 cents per share and "sell the remaining assets at the best possible price for the benefit of all shareholders", according to a letter released yesterday.
The letter, which is due to go to shareholders but was yesterday sent out from the offices of Mr Desmond's IIU Ltd, said: "We are taking this action because we are totally dissatisfied with the way Dunloe has been managed by the board and feel the independent directors have failed to act in the best interests of the shareholders as a whole."
If the resolutions from Mr Desmond and Mr Monahan are supported by Mr Carroll, they will be carried, as the three men now have shareholdings that together exceed 50 per cent of the total amount of shares in issue.
The letter, which is to go out in the names of Mr Desmond and Mr Monahan, said the offer from Mr Smyth on October 25th to buy the company's shares at 42.5 cents per share was inadequate. The offer was supported by the company's independent directors, Sir David Fell, Mr Stewart Harrington and Mr Brian O'Connor.
A spokesman for Dunloe said the independent directors judged the offer to be a good one in the light of the circumstances at the time, following the receipt of advice. They had never said they would not consider another offer.
"I don't accept that they have done anything unreasonable at all," he said. He said the offer was at a considerable premium to the share price at the time.
Mr Carroll, who is not mentioned in documents released by IIU yesterday, bought 3.9 million Dunloe shares on Friday at 45 cents per share. This increased his shareholding to 29.99 per cent. At 30 per cent he is obliged to make a bid for the company.
IIU bought 18.7 million Dunloe shares on Friday, at varying prices between 43 and 45 cents, bringing Mr Desmond's holding to 14.47 per cent. Mr Noel Smyth bought 50,000 shares at 42.5 cents, his offer price. The purchase brought his shareholding to 26.13 per cent.
It is not known if Mr Monahan sold shares on Friday but if he did not, then his shareholding equals about 6.7 per cent of Dunloe. This means the shareholdings of Mr Desmond, Mr Monahan and Mr Carroll amount to more than 50 per cent and so any move promoted by Mr Smyth is unlikely to succeed.
Dunloe complained to the Takeover Panel that Mr Carroll, Mr Desmond and Mr Monahan were acting in concert after the three shareholders voted against a proposal concerning the Cherrywood site in Dublin, which is owned by Dunloe. The panel found that the three were not acting in concert.
