Consortium close to making bid for ICG

ADVISERS TO the Moonduster consortium and Eamonn Rothwell are expected to spend the weekend trying to finalise a bid for listed ferry operator Irish Continental Group (ICG).

Moonduster, which comprises the Philip Lynch-led One51 investment group and the Cork-based Doyle shipping company, and Mr Rothwell, ICG’s chief executive, have been set a deadline by the Irish Takeover Panel of 5pm on Monday to submit a bid.

It is understood that the consortium could seek an extension to this timeframe in a bid to finalise its offer, but it is not clear if ICG’s independent directors would support such a move.

A failure by Moonduster and Mr Rothwell to lodge a bid by the deadline would see them precluded from making another offer for 12 months, unless the Takeover Panel deems otherwise.

ICG has been under offer since October when Moonduster, which owns 25 per cent of the company, indicated that it would seek to bring forward a bid.

In December, Moonduster and Mr Rothwell, who holds 16 per cent of ICG, announced that they were considering a joint offer for the ferry group.

Final-stage negotiations are believed to be taking place between the consortium and a group of banks to secure funding for a bid. One informed source suggested that financing for an offer might not be agreed by Monday evening, but added that a bid would be forthcoming shortly.

The banks involved are AIB, Bank of Ireland, Bank of Scotland (Ireland) and Barclays Bank in the UK. Sources indicated that AIB had yet to agree funding with the consortium, but the two sides were thought to be close to a deal.

Moonduster and Mr Rothwell are believed to be considering a bid of up to €15 a share for ICG. ICG’s shares closed up 3.6 per cent yesterday at €14.50, suggesting a small premium to its current price.

The independent directors are expected to push for significantly more than €15 a share. ICG’s revenues declined last year as the economy slumped but the business generates a lot of cash and could be debt-free by the end of 2009.

In a note to clients yesterday, Dublin-based Bloxham Stock- brokers said the “optimal outcome” from the bid process would be a “successful bid that allows ICG merge into a larger business”.

“Investors fretting about valuations could be offered a partial share alternative if they believe the capital upside is significant. It also offers the prospect of combining One51 and ICG to form a larger and potentially more liquid Iseq-listed entity.”