Dunloe Ewart has asked the Takeover Panel to look at the actions of three large shareholders, writes Jane O'Sullivan, Markets Correspondent
The battle for control of Dunloe Ewart took another twist yesterday as it emerged that both executive chairman Mr Noel Smyth and Mr Dermot Desmond's International Investment & Underwriting have raised their stakes in the company.
It also emerged that Dunloe has asked the Takeover Panel to look at whether the three large shareholders who voted down the company's recent proposals for its Cherrywood joint venture in south Dublin were acting in concert.
Property developer Mr Liam Carroll, who holds 28.5 per cent of Dunloe, Mr Phil Monahan, who has a 6.7 per cent stake, and Mr Desmond, who was believed to hold around 2 per cent at the time, all voted to block Mr Smyth's Cherrywood plans.
Following recent share purchases by IIU, which have taken its stake to 7.86 per cent, further representations are being made to the Takeover Panel.
Were the panel to rule that the three were acting together, they would be forced to initiate a bid for the company as their combined shareholding is now around 43 per cent following IIU's recent purchases.
Meanwhile, Mr Smyth - who has made a 42.5 cent per share offer for the company - has raised his stake in the property group to 26.1 per cent after buying shares in the open market on Friday and Monday.
His purchase of more than seven million shares on Friday took his stake to around 24 per cent and he increased it further on Monday when he bought shares in London. Now that independent non-executive director Mr Stewart Harrington has given an irrevocable undertaking in respect of his 0.9 per cent shareholding, Mr Smyth controls 27 per cent of Dunloe. But he faces an uphill battle to gain control of the company if he is opposed by the three large shareholders.
Meanwhile, Dunloe shares continued to hover around 43 cents yesterday as the market waited to see if a counter-offer would emerge. However, dealers said the outcome of current situation was far from clear.
"It's gone beyond just a financial thing. There's a huge personality dimension to it now. No one know where it's going to end up," one market source said.
The current bid is seen as an attempt by Mr Smyth to end the stand-off that has bedevilled the company since Mr Carroll bought into it two years ago.
Since taking a stake in Dunloe, Mr Carroll has blocked a number of Mr Smyth's proposals for the company without ever outlining his own strategy for the group.
Attempts by the two men to break the logjam have so far failed.
Mr Smyth's 42.5 cent per share offer values the company at €167 million and represents a premium of around 46 per cent over the average closing price of Dunloe shares in the year before the announcement. But Mr Carroll- who bought into the company at prices of 48-50 cents a share - is thought unlikely to accept it as it would leave him sitting on a sizeable loss.
