Riverdeep chief executive Mr Barry O'Callaghan looks to have won his battle for control of the educational software group on the day it reports what are expected to be upbeat figures for the last three months of 2002.
The 31-day lock-in period ended last night. It obliged Mr O'Callaghan and company founder Mr Pat McDonagh to sell their blocking 25 per cent stake in the company to any rival bidder offering 10 per cent more than the MBO's $1.51 per share offer for the company.
No rival offer has emerged for the group, despite criticism of the level of the MBO bid, which translates to less than €1.41.
Dublin brokers said last night that while it was still possible for a rival bid to emerge, it was now unlikely. "We still see this offer as undervaluing the shares of the company but, in the absence of a competing offer, it seems assured of success," said one Dublin analyst.
Just two months before Mr O'Callaghan announced his intention to buy the firm, Gores Technology and IBM placed almost 10 per cent of the company at €2.23, a figure that had been seen as a benchmark for any buyout.
The absence of a rival offer will come as a relief to Mr O'Callaghan as the company today announces second-quarter results.
The group is expected to report sales of €66.5 million, up 61 per cent on the same period last year, underpinned by a strong performance from the consumer division which includes the first full- quarter contribution from Broderbund. NCB Stockbrokers also forecasts pre-tax profits before exceptionals of 15.1 per cent, nearly three and a half times the figure for the year-ago period.
Reed Elsevier yesterday posted a 45 per cent rise in profits from its educational division. Commenting on analyst fears that shrinking state funds in the US could hit performance, Reed said it expected modest growth this year in the US schools market compared with a 5 per cent decline last year.
Reed, which has a 3.5 per cent stake in Riverdeep, was among those tipped to bid for the company but has failed to move despite that upbeat view of the US educational market.
The offer by MBO vehicle Hertal closes on Wednesday, although this is likely to be extended, with most shareholders thought to have held off making a decision pending the end of the lock-in period.
