A move by the McCann family, once synonymous with Fyffes, to take Balmoral International Land fully private secured backing at an extraordinary general meeting (egm) on Thursday, even as some small shareholders vented ire as they face being squeezed out under the deal.
Almost 98 per cent of voting shareholders, led by McCann-controlled vehicles that already own just over 61 per cent of the stock, cast in favour of a mandatory buyback of stock held by investors holding fewer than 25,000 shares. These account for a combined 22.4 per cent stake in the company and many of them did not vote.
The transaction will increase the direct McCann family stakes and indirect holdings, through vehicles they control, to a combined 79 per cent.
It is being priced at €10.50 a share, 44 per cent below Balmoral’s most recent reported net asset value per share of €18.72.
While it marks a 110 per cent premium to where the shares traded on the grey market last November – before stockbrokers stopped openly facilitating trades due to the burden of paperwork – it is below the €12 level at which a block of over 16,000 shares changed hands last week. That was the first reported trade in 12 months. It is not clear who handled that trade.
Colm Whooley, a small shareholder, described the transaction as “corporate greed” at the sometimes tense egm in Dublin.
“Balmoral is now a healthy company. There is no justification for the [44] per cent discount to take us out,” he said. “It’s not a company in distress or any difficulty.”
Another of four investors to speak – out of about 15 small shareholders that turned up to the meeting – questioned why the company, whose €5 million of administration costs last year equated to 52 per cent of gross rental income, did not opt to sell off its assets instead. He noted that much of Balmoral’s investment assets comprise industrial and warehouse buildings which have outperformed the wider commercial property market in recent years.
Balmoral chairman Carl McCann said the €10.50 price was higher than a share redemption price suggested by Davy, the board’s financial adviser, and reflects how most listed property stocks are currently trading at deep discounts to NAV (net asset value).
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He said the notion of a break-up of the company “wouldn’t be appealing” to directors and other large investors who took a risk committing fresh capital to refinance the business following the financial crisis. “It’s a miracle for the company to be here today,” he said.
He suggested take-private deals over the past five years of property companies Green Reit, Hibernian Reit and Yew Grove Reit, each at a slight premium to NAV, would each likely be priced at a deep discount if they took place today. However, some of the vocal investors countered that NAVs across the sector have already declined in recent years, amid a spike in interest rates and other factors.
The company was originally named Blackrock International Land when it was spun out by Fyffes in 2006 as a separate publicly-quoted entity.
It was delisted in 2011 following a slump in its share price during the property crash, but continues to have thousands of legacy shareholders that have remained on board since the stock market exit.
The McCann family sold their decades-held shares in Fyffes in 2017 to Japanese conglomerate Sumitomo. The Tokyo-based firm subsequently sold the 30 per cent interest in Balmoral it inherited to a vehicle led by the McCanns.
Mr McCann is also executive chairman of Dole Plc, the Irish-based but New York-listed fresh produce company created in 2021 through the merger of Dole Foods with former Total Produce. Dole and Fyffes are among Balmoral’s main tenants.
The fair value of Balmoral’s investment assets, comprised of industrial and warehouse buildings, offices and mixed-use land, edged up to €146.3 million in June from €138 million in December, the company disclosed in a circular in October.
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