One51 share deals put pressure on Capvest over offer

More than €36 million of One51 shares sold for €1.85-a -share yesterday in a move that could raise the bar for potential suitor Capvest, which is seeking shareholder backing for a €1.80 bid.

Capvest recently told One51 shareholders that it is willing to pay €1.80 a share – €282 million – for the group, and is thought likely to proceed with a formal offer if enough investors indicate that they will sell at that price.

However, a total of 19.6 million of One51’s shares sold yesterday for €1.85 in two tranches. Taken together both transactions were worth €36.3 million and represented 12.5 per cent of the overall company.

Shares are being bought for the unknown buyer by Investec in a move which is likely to put pressure on Capvest to increase the price it is willing to pay for the company.

Scale of transactions

A number of smaller sales for €1.85 and €1.82 went through earlier this week, but observers say that the scale of yesterday’s transactions signals that a significant investor believes the company is worth more than Capvest’s mooted offer.

At €1.85, the entire group is worth €290 million, compared to the €282 million on the table. At least some existing shareholders, including its long-standing co-op backers, were known to be willing to sell at €1.80, but yesterday’s events could change this stance.

Sources have argued that Capvest is unlikely to increase the offer that it has discussed with the board and shareholders. According to recent reports, financier Dermot Desmond, who already owns a significent stake in One51, has told brokers he is willing to pay €1.95 for more shares in the group, although he is not considering a rival bid.

Instead, he was said to be interested in increasing his stake to a significant level as he believes that the group under its current mangement, led by chief executive Alan Walsh, now offers long-term value.

A €50 million to €60 million dividend from the sale of its interest in wind energy investor, NTR, will further bolster One51's balance sheet.

This will give it the scope to add to the purchases it made in the UK and Canada this year, which should in turn boost its value and earning power.

On this basis, Merrion Stockbrokers analyst Darren McKinley has suggested that the company is unlikely to sell to Capvest and is more likely to float at about the €2.50 mark within the next 18 months or so.

*This article was amended on Friday August 14th