DCC rejects €6.5m Hogan offer for its Kylemore stake
DCC said it has no intention of selling its 50pc stake in catering services group Kylemore (KSG), despite a €6.5m offer for the holding from its founding family, the Hogans.
The Hogan family, which owns the other 50pc of the business, made the offer public yesterday.
But a spokesman for DCC said that the group had already rejected an indicative offer from the Hogans as being too low and said the company was "somewhat surprised" at the statement from KSG.
"DCC wouldn't normally comment on such matters," said the spokesman, "However, DCC is happy with the performance of its shareholding in KSG and has no intention of selling."
He added that the family had previously indicated it wanted to make the €6.5m offer to DCC but that the group believed it "didn't reflect the value we placed on the business and that we had no desire to sell".
The Dublin-based Kylemore group has been in the Hogan family since 1920 and provides contract restaurant and catering services at 110 locations around the country. It employs 1,000 people and generated turnover of €54m in its last financial year and a €1m operating profit.
"As a shareholder in KSG since 1999, DCC has provided excellent support and guidance as the group has grown and diversified into contract restaurant and catering services," said said Brian Hogan, the chief executive of the Kylemore group. "We believe this offer now provides an opportunity for DCC to sell its shareholding in KSG so it can concentrate on its core interests."
A spokesman for KSG said that the Hogan family believes the 6.5 times multiple used to value the business "provides a fair value for DCC's holding".
A sales, marketing and distribution group, DCC is the UK's largest supplier of home heating oil. In its last financial year it posted revenue of £10.6bn and a £228.3m operating profit. The Irish company, headed by Tommy Breen, is listed on the London Stock Exchange and releases interim results today.
Last year, DCC sold other assets in the food space.
It sold its Kelkin and Robert Roberts units to Irish food group Valeo for €60m.