Shares in educational software group, Riverdeep, regained some of last week's losses yesterday, clawing back two cents to close at €2.25 as the company announced new shareholder lock-up arrangements.
Major internal shareholders, executive chairman and chief executive officer, Mr Barry O'Callaghan, and company founder, Mr Pat McDonagh, have both agreed to extend lock-up arrangements on their holdings until August next year. Mr O'Callaghan holds about five per cent of the company, while Mr McDonagh owns a stake amounting to about 23 per cent. Mr O'Callaghan said last week that he was interested in building his current holding up to a 10 per cent stake.
Both men had been subject to an earlier lock-up, which recently expired. Given that another significant shareholder, Reed Elsevier, remains locked up until October 2004, the new arrangements mean that a third of the company's shares are guaranteed to remain off the market for the next year.
Meanwhile, Riverdeep has confirmed that major strategic shareholder, IBM, has reduced its stake in the company by one third, bringing it to about 4 per cent. The announcement comes after unusually heavy trade in the stock on Friday, when it shed 9 per cent of its value in Dublin.
IBM, which had also been bound by a lock-up agreement, which recently expired, now holds 10.2 million shares, having released 5.2 million shares.
Riverdeep has also confirmed that a second major shareholder, Gores Technology Group, has sold its entire shareholding in the company. Gores placed 11.7 million shares, a 5 per cent holding, on the market on Friday at €2.23 per share.
Gores, which had not previously been bound by a lock-up agreement, acquired its Riverdeep stake last year when it sold The Learning Company to the Irish group. Riverdeep last week paid €58 million for Broderbund, the part of The Learning Company that it did not already own.
Merrion Stockbrokers analyst, Mr John Coolican, said yesterday that losing Gores as a shareholder would in no way be damaging.
"Gores would not be a strategic partner in the way that IBM would be," said Mr Coolican, noting that Riverdeep's relationship with Gores was purely financial.
More surprising, according to Mr Coolican, was the reduction in IBM's holding, which he said would have registered a loss for the global giant.
He said that the overall realignment of Riverdeep's shares represented good news for the company and its remaining shareholders, since it offered an opportunity for relative stability in the share price over the near term.
"We can now value the shares on their fundamentals," he said, adding that Riverdeep need no longer fear large blocks of shares coming to the market at once.
