After failing to find any alternative to the group's chronic financial problems, the board of James Crean has recommended a €12.2 million (£9.6 million) buyout offer from chairman Mr Ray McLoughlin. The offer from Mr McLoughlin values Crean shares at €0.27 each, compared to the high of €3.82 the shares reached 10 years ago. Mr McLoughlin, who already holds 11.5 per cent of Crean shares, is receiving an "inducement fee" from Crean of €122,000 - one per cent of the value of his offer.
According to a statement, the board asked Mr McLoughlin earlier this year to consider buying the company from its shareholders.
Initially, three other directors, Mr Joe O'Sullivan, Mr Martin Delaney and Mr Alastair McGuckian expressed interest in backing such a move. But despite this initial interest, the three directors are not involved in the offer tabled yesterday by Mr McLoughlin.
Despite the company being effectively for sale, no offers other than that from Mr McLoughlin were received.
The offer from Mr McLoughlin is, in reality, the last option for Crean shareholders as alternatives that would have given shareholders an exit from the company were ruled out by the board. These options included selling the group's lossmaking US food businesses and buying back shares.
The recommendation by independent directors Mr Gerry O'Toole and Mr Fergus Smyth came as Crean also issued a trading statement that illustrated the deep financial crisis facing a company that was once one of the Irish stock market's most sought-after shares.
With an element of understatement, the trading statement said: "There is considerable uncertainty about the outlook for the group."
The statement shows that Crean has been in breach of its banking covenants for several months and that there will be a total write-off of around €20 million for the year to December 2000. The banks have agreed to reschedule Crean's borrowings but this is conditional on a turnaround from the negative trends of last year and so far this year.
Trading in Crean's poultry and frozen meals business deteriorated further in the current year while trading in Oakhill, the printing company in which Crean has a 20 per cent stake, has also been very poor this year.
