The O'Dwyer brothers, Liam and Des, have extended their €11 offer for Capital Bars for 21 days while arbitrageur Mr Austin Conboy has increased his stake to 9.3 per cent, tantalisingly short of the 10 per cent he needs to block the deal.
Full Circle Investments, the O'Dwyer takeover vehicle, announced yesterday that it had the support of shareholders representing 71.4 per cent of Capital Bars equity. Incomplete acceptance representing another 7.7 per cent of the firm were also received by yesterday's deadline and once they have been "validated" the O'Dwyers will control 79 per cent of the company.
Full Circle added that under certain circumstances it would have "a potential interest in excess of an 86 per cent of the enlarged share capital of Capital Bars". This would require the issuing of 25.5 million shares in the firm to the O'Dwyers under the terms of the 1999 agreement in which they merged their pub and hotel business with Break for the Border as the Capital Bars business was then known.
Full Circle has opted to extend the offer in the hope of reaching the acceptance threshold of 90 per cent after which it can compulsorily acquire the group's remaining shares. This target looked somewhat optimistic last night after Mr Conboy announced he now owned 9.3 per cent of Capital Bars.
Mr Conboy, who has interests in transportation and shipping, has been buying shares in the market since before Christmas at a premium to the 21p sterling being offered by the O'Dwyers. He has indicated he will buy up to 25 per cent of the company.
Mr Conboy, who could not be contacted yesterday, has not commented directly on the Full Circle approach. It has been speculated that he is trying to force the O'Dwyers to up their bid to a figure in excess of 24.5p sterling.
Market sources said yesterday the O'Dwyers were unlikely to increase the bid and were more likely to proceed with the delisting of Capital Bars, even if they do not get 100 per cent control. The O'Dwyers would have a minimum 86 per cent stake in the delisted entity and the maximum that Mr Conboy could have in this situation is 14 per cent, pointed out the source.
Once the firm is delisted, the O'Dwyers can come to an agreement with Mr Conboy, possibly for more than the 21p per share that they are offering. Any small shareholders who do not accept the offer could possibly avail of any offer made to Mr Conboy.
However, sources close to Full Circle stressed it was very possible that Mr Conboy could be offered less than 21p per share. They urged undecided shareholders to accept the current offer.
There was subdued trading in Capital Bars shares which closed unchanged at 26p sterling in London yesterday. Some 44,000 shares changed hands. The new closing date for the offer is 3 p.m. on January 18th, 2002.
