The independent directors of Irish Continental Group (ICG) are set to meet representatives of the parties proposing a rival €530 million offer for the shipping line.
ICG chief executive Eamonn Rothwell and his colleagues, with the backing of AIB, have already tabled an offer of €18.50 a unit - €471 million - to take ICG private.
But Cork shipping company Doyle Group and the Philip Lynch-led investment vehicle, One Fifty One, yesterday said they were in talks regarding a possible €20 a unit offer, a bid valued at close to €530 million.
They and three other investors bought shares at €19.15-€20.03. These five investors hold 22.29 per cent of the group, enough to halt the management bid.
ICG's independent directors, John McGuckian, Peter Crowley and Bernard Somers, are likely to seek a meeting with Doyles and One Fifty One to clarify the statement they issued yesterday. It said they are "in discussions regarding a possible offer to acquire the entire issued, and to be issued, share capital of ICG".
"It is currently envisaged that the possible offer, if made, would be at a level of not less than €20 per ICG unit (each unit comprising one ordinary share and three redeemable preference shares).
"The consortium intends to seek, inter alia, the consent of the independent board of ICG to undertake a confirmatory due diligence exercise and thereafter, a recommendation from the independent directors of ICG that ICG shareholders accept the possible offer, if made."
The statement stresses that yesterday's announcement does not amount to a firm intention to make an offer, and adds that there is no certainty that the parties will bid for the company.
Shareholders are due to vote on the management offer at meetings in Dublin on April 12th. However, the independent directors said yesterday that these meetings will be adjourned. They also said that they had initial talks with the consortium regarding its proposed offer.
Doyle Group, One Fifty One and a number of institutions and funds have been buying ICG shares for prices well above the management offer of €18.50.
Two weeks ago, they had separately acquired enough shares to block the management deal. Doyles and One Fifty One hold 8.55 per cent, just over two million shares, between them.
The pair spent €49.3 million acquiring this holding. One Fifty One spent €25.6 million building up its stake, buying at €19.25 and €19.50 a unit. Doyle spent €13.7 million, buying its holding in two separate tranches for €20 a share.
Three others, Lehmann Brothers, Centaurus Capital and Sandell Asset Management, all bought at €19.15 - €20.03. Of these, Lehmann holds the biggest single stake, with 6.72 per cent, over 1.5 million shares. Centaurus is next with 3.64 per cent and Sandell holds 3.38 per cent. They hold 13.74 per cent between them.
A bid such as the management offer for ICG usually needs the support of shareholders with more than 75 per cent of the company. However, in ICG's case, the High Court has ruled there are two classes of stakeholder.
The first is the management and connected parties, including independent directors and its banker, AIB. The second is the independent shareholders, which includes those equity holders who bought at or above €18.50.
The bid needs the support of more than 75 per cent of both classes to succeed. As the independent shareholders have just over 82 per cent of the company, this means that just over one-quarter of that figure, 20.52 per cent, is enough to halt the bid.
The five investors do not need to act together to do this, they can simply vote against the offer to stop it going ahead.
