Share price rise puts Barlo's value above MBO offer

Shares in Barlo climbed by almost 8 per cent to 41 cents yesterday, putting a higher value on the company than the management buyout (MBO) team being led by Dr Tony Mullins, the firm's chief executive.

The rise gives weight to a belief held by some market-watchers that Barlo could be worth significantly more than the €70 million, or 40 cents per share, being offered by Dr Mullins.

It came two days after an existing Barlo investor, Mr Dermot Desmond's IIU vehicle, increased its holding in the group to 6.3 per cent by buying 1.2 million shares.

This purchase sparked speculation that Mr Desmond is stake-building with a view to eliciting a higher bid for the company.

Dr Mullins's offer includes a provision that would force him to either accept or match a bid of 44 cents per share for the group.

Some observers have taken this to mean that the MBO team could find the means to offer more for Barlo if they needed to do so.

Yesterday's trading volume of 1.5 million shares suggests that Barlo is drawing significant attention from investors willing to take a chance on Barlo attracting a more valuable offer.

The MBO offer is conditional upon acceptance in respect of 80 per cent of Barlo shares.

Dr Mullins said yesterday that he had transferred some five million Barlo shares from his associate company, Syden Investments, into his own name. He is now the named owner of 3.3 per cent of the company.

Meanwhile, Bank of Ireland Nominees has declared a 25 per cent holding in the company. This stake includes shares held by Bank of Ireland Asset Management as well as other Bank of Ireland clients.