Eamonn Rothwell and his management buyout (MBO) team will receive up to €4.7 million in compensation from Irish Continental Group (ICG) if their bid for the ferries company is trumped by a third party.
This payment, which has been approved by the Takeover Panel, has been agreed by Aella, the MBO team's acquisition vehicle,with ICG as reimbursement for expenses incurred in making its €18.50-a-share offer for the ferries group. It represents up to 1 per cent of the €471.7 million offer made by the MBO team.
Details of the reimbursement are included in the offer document for ICG which was posted to shareholders yesterday.
The payment will be made in the event of a competing offer being recommended by ICG's independent directors or these directors no longer recommending Aella's offer to shareholders.
In the event of Aella withdrawing its bid, the MBO team would only be entitled to receive a maximum €500,000 from ICG for expenses incurred.
Speculation about a rival bid has mounted in the past week as the Philip Lynch-led One51 acquired 5.65 per cent of ICG's shares and hedge funds bought 20 per cent of the equity.
Some 600,000 shares changed hands yesterday, with the stock closing at €20.15, an 8.9 per cent premium to the MBO team's offer price. It was not clear if Mr Lynch had acquired additional shares in ICG.
The MBO team's offer is being completed by way of a "scheme of arrangement", which means the deal needs the approval of the High Court.
ICG shareholders, excluding the MBO team, will be asked to approve this process at a meeting to be held at the Berkeley Court Hotel on April 12th at 3.15pm.
It is then proposed to convene a meeting of Aella shareholders for the same purpose at 3.30pm in the same hotel. Finally, all shareholders will be asked to vote on the offer itself at an egm to be held at 3.45pm.
The offer document also notes that the independent directors have looked at its leasehold interests over a 33-acre site at Dublin Port. "The alternative use value of the Dublin Port leases is not a material factor in the decision of the independent directors to make a unanimous recommendation that ICG shareholders vote in favour of the acquisition," the document states.
The offer document shows that the MBO team has 227,500 share options that expire this month. All of the options can be exercised at €5.30 a share. Mr Rothwell and his colleagues are expected to exercise the options, which would then be rolled over into the new company in the event of their bid being successful.
