THE vast majority of Whiskey Manufacturing (WMC) shareholders are opting for the cash offer from Cooley Distillery, rather than Cooley shares.

Dr John Teeling, chairman of both companies, said 90 per cent of shareholders who are accepting the offer have nominated cash, with 10 per cent wanting the Cooley shares.

The 446 shareholders in Whiskey Manufacturing, a sister company of Cooley, received an offer of £2.6 million in cash or Cooley shares - there is a ceiling that not more than 50 per cent be taken in shares - from Cooley three weeks ago.

The offer is £1 in cash for each £1 WMC share or £1 in cash and one ordinary Cooley share for every two WMC ordinary shares.

The offer would allow the shareholders, who invested under a Business Expansion Scheme (BES) in 1989, to realise their investment at £1, which is par. If the tax relief is taken into account, said Dr Teeling, the return would amount to 13 per cent.

The offer, which closes on Friday, is conditional on 80 per cent acceptances. "We have got about 60 per cent so far," said Dr Teeling. The date for acceptances can be extended.

If sufficient acceptances are received, the offer will be financed by Cooley from a one-for-two rights issue to raise £2.6 million, £1.6 million of which is underwritten. Dr Teeling said there should be little difficulty in raising £2 million and there can always be a placing to raise some funds.

Both companies' shares are irregularly traded in a grey market which Dr Teeling said is not sat is factory as the transactions tend to depress the share price. Whiskey Manufacturing's £1 shares were last traded at between 75p and 95p.

Cooley's 10p shares were traded at 100p compared with 315p in the last issue in 1989.

The offer to Whiskey Manufacturing shareholders is well below the 145p they would have received under the 1994 agreement reached with Irish Distillers to acquire the two companies.

However, that deal was shelved following objections from the Competition Authority.

Dr Teeling said Cooley intends to have its shares listed on the British Alternative Investment Market in 1998. It increased its loss before tax from £24,000 in 1994 to £134,000 in 1995. Sales fell from £3.54 million to £3.22 million. Cooley hopes to move into profits by 1996.