Property developer rebuffs bid for his Greencore stake
Friday December 05 2008
Property developer Liam Carroll is believed to have rebuffed an approach from Davy to acquire his 29.5pc stake in food group Greencore in recent weeks on behalf of clients.
The low-profile businessman paid €246.8m for his stake in the group at an average price of around €4.18 per share in recent years.
The stock has subsequently fallen to 90c, leaving Mr Carroll sitting on a stake worth €60m -- and a paper loss of almost €186.8m.
Market sources said the brokerage offered to buy Mr Carroll's shares at a discount to where the shares were trading at the time.
Davy declined to comment while Mr Carroll could not be contacted yesterday evening.
Greencore, headed by Patrick Coveney, revealed last week that its pre-tax profits fell 30pc to €41.7m in the year to the end of September as the biggest sandwich maker in the UK market grappled with a weakened sterling rate against the euro and declining consumer confidence.
Shares
Shares in the group have tumbled almost 80pc so far this year, dented further by news of a "cost concealment issue" in its Scottish mineral water business.
Mr Carroll, who first emerged as a shareholder in Greencore in 2006 when he bought financier Dermot Desmond's 21.6pc interest in the group, was believed to be interested in the group's potential development land in Mallow, Carlow and the UK. However, the stock's performance this year has also partially reflected market assumptions about the declining value of its landbank.
Two months ago, Icelandic food group Bakkavor sold its 10.9pc stake in Greencore, crystallising a loss of over €70m on its holding.
The disposal came at the height of Nordic nation's financial woes.
The appearance of Bakkavor among stakeholders in Greencore earlier this year had initially prompted speculation in the market that the company may be looking to merge the business with Geest, the UK's largest maker of freshly prepared foods, which the Icelandic company acquired in 2005.
Meanwhile, Mr Coveney last week reiterated his target of doubling sales from the US division each year over the next five years. This will require some acquisitions if it is to be achieved, he admitted, though the good news is that the US is finally embracing the chilled food concept.
- Joe Brennan
