ANALYSIS:The ICG saga has left the main shareholders significantly out of pocket, writes CIARÁN HANCOCK
THERE ARE no winners from the failure of Philip Lynch’s Moonduster and Eamonn Rothwell to raise the finance to jointly acquire Irish Continental Group.
The three main shareholders - property developer Liam Carroll, Moonduster (comprising Lynch’s One51 group and the Doyle shipping company in Cork) and Rothwell – are all significantly out of pocket as a result of their ill-advised three-way tussle for the ferry business in 2007 that saw them pay up to €24 a pop to buy ICG stock and sink many millions into buying shares.
Rothwell’s Aella consortium offered to pay €24 a share for ICG in the autumn of 2007, a bid that was rejected by Lynch.
These shares are now trading just above a tenner with no obvious kicker in sight.
One wonders what One51’s shareholders and the Doyle group in Cork now make of that decision?
Carroll is believed to have borrowed more than €200 million from AIB to buy his shares.
This stock could now conceivably end up with the proposed State-owned National Asset Management Agency.
That’s to say nothing of ICG’s other shareholders, many of whom hold only a small number of shares but find themselves as owners in a highly illiquid stock.
Two years ago there was talk of ICG’s 33 acres being worth hundreds of millions of euro if Dublin Port were moved up the coast to Bremore, near Balbriggan. The recession has put paid to that idea.
However, the ferry business is in reasonable shape. It has a good franchise, a modern fleet, throws off a lot of free cash and could be debt free this year or next. How did this stalemate ever come to pass?
Hindsight is a wonderful thing, and none predicted the subsequent collapse in the Irish economy, but it still seems incredible that Lynch rejected a €24-a-share offer from Rothwell in 2007. It was a more than generous offer.
The pair subsequently put aside their differences to come together with a joint offer, which has now fallen.
Moonduster and Rothwell are precluded from bidding again for 12 months yet they can’t possibly want this saga to drag on for that period.
Some advisers are hoping that the economic backdrop might brighten within that timeframe, allowing the consortium to secure the finance to once again bid for the business with the permission of the Irish Takeover Panel.
Moonduster and Rothwell are thought to have gone very close to securing the necessary finance for their bid.
Given the scale of the economic crisis here and the public scrutiny under which all banks are currently operating, there can be no guarantee that bank finance will be more readily available within the next year.
There is always the possibility of another bidder emerging, although this looks unlikely given the economic backdrop and the tight shareholder structure.
For now, ICG remains in dry dock.
It will require some skill and ingenuity for Rothwell, Lynch and Carroll to navigate a way out of this mess in the medium term.
