The consortium led by Mr Nelson Loane has almost completed the €161 million (£127 million) takeover bid for Adare Printing. Acceptances in respect of 12.1 million ordinary shares, representing 84.8 per cent of the equity, have been received.
The consortium can now compulsorily acquire the remaining shares but has decided to leave it open until September 4th. After that, the outstanding shares will be compulsorily acquired, and Adare will be turned into a private unquoted company, following a delisting of the shares on the Irish Stock Exchange and the London Stock Exchange. The bid has been passed by the regulatory authorities.
Mr Loane, Adare's chief executive, will have an 18 per cent stake in NAPG, the vehicle making the takeover bid, or more than twice the 8 per cent he had in Adare. Mr James Coll, a co-director, will have 2 per cent. The largest shareholder will be funds of venture capitalist, Allen, McGuire, which will have an 80 per cent stake; it had acquired shares representing a 13.5 per cent stake in the market. Allen, McGuire was to have been paid an inducement fee of 1 per cent of the value of the offer, or about £1 million sterling (€1.65 million), had the offer lapsed or been withdrawn. With the offer succeeding, this is not payable.
The Adare employees are to be offered up to 555,556 Adare shares, under a share-option scheme, based on performance, within three months. That would represent 10 per cent of the enlarged equity. Uberior Trading, part of Bank of Scotland, has warrants which, if exercised, would represent an additional 5 per cent. The bid was recommended by the independent directors, Mr Denis Bergin and Mr James Osborne. They are to receive an additional fee of £100,000 each because of the extra work involved during the bid process.
The offer of €11.46 per share, represented a premium of 70.3 per cent on the price prior to the initial MBO approach by finance director, Mr Peter Lynch, who had the backing of 85 to 100 managers. He subsequently resigned from the company following his withdrawal from the bidding process and his failure to resurrect a new bid. He stands to gain about €4 million (£3.2 million) through the sale of his shares and options in Adare.
Mr Loane will receive €12.9 million (£10.2 million) for his Adare shares. He also stands to gain €1.9 million (£1.5 million) from his options. One of his main priorities will be to gain the support from the managers who had backed Mr Lynch.
Adare's latest results, announced last month, showed a fall in pre-tax profit from £17.1 million (€21.7 million) to £15.9 million (€20.2 million) in the year ended April 30th 2000. This decline arose despite the rise in sales from £168.9 million to £212.9 million. Profit margins contracted, reflecting more intense competition in its British market.
On the future, chairman, Mr Bergin, said the group was coming to the end of a period of consolidation and was now looking forward to success in its established focus areas.
