ICG shares dive 23% as consortium shelves bid

IRISH CONTINENTAL Group’s (ICG) share price collapsed by 23.8 per cent yesterday to a 41-month low of €10.10 after the Moonduster and Eamonn Rothwell consortium told the ferry operator that it would not be proceeding with a bid for the business.

In a statement to the stock exchange yesterday, Moonduster said that “despite their best efforts over several months, it was not possible to bring forward an acceptable offer in the current economic climate and difficult funding environment”.

Moonduster and Mr Rothwell – who is ICG’s managing director – are now precluded from making a new offer for ICG for 12 months, except with the permission of the Irish Takeover Panel.

The offer period for ICG began on October 23rd last year when Moonduster – which comprises the Philip Lynch-led One51 investment group and the Cork-based Doyle shipping company – indicated that it would seek to engage with other large investors in the business to try and bring forward an offer.

In December, Moonduster and Mr Rothwell indicated that they would make a joint offer for ICG.

In a statement yesterday, ICG said: “A prolonged offer period is an inevitable distraction for a company and in that sense the ending of the offer period after more than six months is, in the absence of the likelihood of an offer being made to ICG’s shareholders, in the best interests of the company.”

It is understood that Moonduster and Mr Rothwell could not secure bank finance for the deal by yesterday’s deadline of 9am, which had been set by the Takeover Panel.

Moonduster and Mr Rothwell had held talks in recent weeks with a group of banks, comprising AIB, Bank of Ireland, Bank of Scotland (Ireland) and Barclays Bank.

Informed sources said Moonduster and Mr Rothwell were proposing to offer between €13 and €14 a share for ICG in cash with a possible additional loan note.

It is believed that the cash element of the proposed offer was not acceptable to ICG’s independent directors, who were seeking closer to €18 a share for the ferry business.

The offer would also have required the support of property developer Liam Carroll, who is ICG’s biggest shareholder with a 29.3 per cent stake.

It is not clear if Mr Carroll was prepared to support the bid from Moonduster and Mr Rothwell.

There was one crumb of comfort for ICG shareholders yesterday with the company’s decision to make a €1 a share payment to investors from the purchase of redeemable shares.

This will cost ICG about €24.5 million and net Mr Carroll about €7.2 million.

Mr Lynch’s Moonduster consortium will earn about €6.1 million from the redemption of shares while Mr Rothwell will pocket about €3.9 million.

The ICG takeover saga has rumbled since March 2007 when Aella, a consortium led by Mr Rothwell, made an €18.50-a-share bid for the company.

This was trumped three months later by Moonduster, which offered €22 a share. Aella subsequently offered €24 a share but its bid was rejected in September 2007.

Aella’s second offer had placed a value of €611.8 million on ICG.

It closed yesterday in Dublin with a market value of €247.8 million.