Barlo looked set to be the next Irish listed company to be taken private last night after its chief executive, Dr Tony Mullins, took the first step towards making an offer that would value the group at €52.5 million or 30 cents a share.
The group released a statement yesterday saying Dr Mullins had made an approach which it said "may or may not lead to an offer being made for the company". He later announced that the approach was made "on the basis of an offer price of 30 cents for each Barlo share".
Both statements stressed the process was at a very early stage and said that there could be no certainty that an offer would be made as a result of the approach.
An offer of 30 cents would value the company's 175 million shares at €52.5 million, and place a premium of 50 per cent on the stock's six-month average, which is 20 cents. Its 12-month average is 21 cents.
The company's shares jumped by 40 per cent on the news. They closed at 35 cents, up 10 cents from yesterday's 25 cents opening price. Around 2.4 million individual shares had been traded on the Dublin market by close of business.
IBI Corporate Finance is advising Dr Mullins. It was not revealed last night if any other parties were involved in the approach. AIB Corporate Finance is advising Barlo.
Dr Mullins is one of the two biggest shareholders on the board. He personally holds 763,000 shares, while he and his family hold 4.965 million shares through a company, Syden Investments Ltd. In total this comes to 2.3 per cent of the stock, which at 30 cents would be worth over €1.7 million.
The group paid Dr Mullins €614,000 last year, and he has 1.5 million in share options, all exercisable at more than €1.
Deputy chairman Mr Aidan Barlow holds more than 5.1 million shares, worth €1.5 million at 30 cents. The largest shareholder is Bank of Ireland Asset Management which has 25.4 million shares or 14.5 per cent of the group. A 30-cent offer would value this at €7.6 million.
AIB has 9.6 million shares or 5.5 per cent, worth €2.9 million at 30 cent. Financier Mr Dermot Desmond's investment vehicle, International Investment and Underwriting, holds 8.75 million shares and London-based Ennismore Fund Management holds 6.9 million. A 30-cent offer would value these stakes at €2.6 million and €2 million respectively.
Barlo manufactures radiators and industrial plastics. In the year to March 31st, 2003, it had a turnover of €306 million and profit before tax of €9.1 million. Adjusted earnings per share were 5.76 cent.
Its subsidiaries include the once-listed Athlone Extrusions and companies in the UK, Germany, Spain, Belgium and Eastern Europe. Its radiators sell under the Barlo and Veha brands.
Market sources were not surprised by yesterday's move. When it announced its interim results in May, the company predicted that profit growth this year would be minimal. It had just emerged from two difficult years of trading.
