IWP shares tumble as MBO bid rejected

Shares in personal care group IWP plunged by almost 9 per cent yesterday after management's offer for the company was rejected by its board.The offer, which was made at 44 cents, was dismissed at an IWP board meeting yesterday morning on the basis that it did not reflect "the inherent value of the group".

In a statement issued yesterday afternoon, the board said discussions with the management buyout (MBO) team, which was led by IWP deputy chief executive and finance director Mr Bernard Byrne, had now ended.

The offer was considered by a committee including IWP chief executive Mr Joe Moran, who owns 16 per cent of the company.

It is thought Mr Moran was not prepared to accept a bid so far away from the 50 cents he reportedly desired.

Mr Moran declined to comment on how much he thought the firm was worth last night, but said he genuinely felt the offer of 44 cents was not the best option for shareholders.

He said shareholders would "do better" by sticking with the company and bemoaned the market's lack of recognition for the true value of its assets.

The committee was advised by Goodbody Corporate Finance.

It now looks probable that Mr Moran, who has stood at the helm of IWP for more than 20 years, will step aside as chief executive and take up the role of chairman as an external candidate is brought in to lead the company.

An announcement on management changes is expected to be made early next week.

Mr Moran said he planned to remain involved with the company for a long time to come "in one role or another".

He is also the 51 per cent owner of Manor Park Homebuilders, which acquired the Abbeville lands in north Dublin from the Haughey family last month.

Mr Byrne, who has overseen a major restructuring at IWP since he became deputy chief executive last year, did not issue a statement on the termination of the talks yesterday.

It is unlikely, however, that he will attempt to put together a new offer for the company, sticking instead with his view that the original bid more than represented its worth. A spokesman said last night that he was reflecting on the matter.

At 44 cents, Mr Byrne's bid offered a 70 per cent premium on IWP's price before the initial MBO approach was made public in August.

Shares in IWP dropped three cents to 31 cents in Dublin yesterday news and closed 7p lower at 17.5p sterling in London.

Mr Byrne was advised on the failed buyout by Key Capital and NCB, and had secured backing for his bid from a consortium of investors. He was joined in the bid by fellow members of the IWP management team who have not been named.

It is unclear how the termination of the offer process will affect his future at IWP, but no immediate change is expected.

The MBO process has been relatively short by standards recently set on the Irish market, lasting less than a month.

The collapse of the discussions will come as a surprise to some observers, since IWP has long been touted as a probably MBO target.