The board of Jurys Doyle last night said it would be prepared to recommend a takeover offer of €17.50 per share from Precinct, the consortium led by developer Bryan Cullen.
The move effectively removes the largest obstacle standing between Precinct and a €1.1 billion bid for the hotel group.
In a statement to the stock exchange after the market closed yesterday, Jurys said a majority of its board would be content to recommend a €17.50 offer, provided it carried a shareholder acceptance threshold of no less than 50.1 per cent.
This is a lower acceptance level than Precinct had previously proposed, with the reduction thought to have been the subject of detailed discussions between advisers to both sides yesterday.
On Thursday Precinct had proposed offering €17.50 on the basis of an 80 per cent acceptance rate, or €16.75 with an acceptance rate of 65 per cent or less.
The twin-track approach was designed to allow Precinct to get around the stance of the Doyle and Beatty families, which together own 30 per cent of Jurys and have shown no appetite for a takeover. Precinct employed a similar strategy when it took over the Gresham Hotel Group last year.
The Jurys board said last night that it had considered both proposals but had concluded that they "failed to deliver an appropriate combination of price and certainty for all Jurys Doyle shareholders".
The new 50.1 per cent threshold represents the solution to this, probably because the board sees this as a level that Precinct could easily achieve, regardless of the position of individuals or institutions holding large stakes. The board is thought to have been keen to make an exit at €17.50 an option for all shareholders.
A spokesman for Precinct said last night that the consortium was "delighted" with the latest development, which will allow due diligence to begin.
"We look forward to progressing the matter and making a formal offer to shareholders," he said. He paid tribute to the efforts of the Jurys board over the past few days.
The Takeover Panel said yesterday that it would give Precinct another three weeks, until August 19th, to put forward a firm offer for Jurys. The consortium will be hoping that all shareholders, including the Doyle and Beatty families, will eventually choose to sell at the new level.
If Precinct did manage to achieve a 50.1 per cent acceptance rate, dissenting shareholders would naturally find it harder to maintain their position.
Jurys was careful last night to point out that Precinct's latest proposal will not stand in the way of the agreement to sell 4.84 acres in Ballsbridge in Dublin to developer Sean Dunne for €260 million. This deal, which was announced on Thursday, requires approval from the company's shareholders.
The company also made it clear that the latest development does not represent an offer and does not make it certain that an offer will emerge.
Shares in Jurys were in demand yesterday, touching a high of €16.45. The stock closed at €16.30, 70 cent above Thursday's close.
