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Applegreen bosses cut stake to 41pc as firm raises €175m

CEO Bob Etchingham's and COO Joe Barrett's combined stake is worth more than €300m following equity raise


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Strong investor demand for an equity raise by Applegreen will see founder and chief executive Bob Etchingham, as well as chief operations officer Joe Barrett, cut their combined stake in the business from almost 53pc to 41pc.

But their shareholding will be worth €300m when the equity raise is finalised.

That's more than the €200m their combined stakes were worth when Applegreen floated on the stock market in 2015, after which they had a 70pc share in the company.

The forecourt retailer has conditionally raised €175m from existing and new investors to help fund its acquisition of just over 50pc of UK motorway services operator Welcome Break. That's more than the €100m to €140m that Applegreen intended to raise. Appetite for the equity raise exceeded expectations.

Speaking to the Irish Independent, Mr Etchingham declined to say how much could have been raised in the process, which was handled by Shore Capital and Goodbody Stockbrokers. He said there had been "significant excess demand".

However, industry sources said it's likely that Applegreen could easily have raised more than €300m such was the demand for its shares.

The equity raise has also introduced about six new blue-chip, pan-European investment funds onto Applegreen's shareholder base. Mr Etchingham, who founded the stock market-listed Applegreen in 1992, said the interest in the equity raise was an indication of how investors view the strength of the company and its opportunities.

He said that the new investors "would be there to support the business in the future".

An investment vehicle owned by Mr Etchingham and Mr Barrett had pledged to invest as much as €30m in the equity raise, but it was up to the bookrunners to ultimately decide how much the vehicle would have to stump up.

The pair are investing a total of €10m, which will cut their stake in the business to 41pc.

Mr Etchingham said he was happy to see the company's freefloat - the number of shares held by public investors rather than company directors or other big backers - improve following the equity raise, which will be finalised next month.

"We're conscious of the fact that liquidity in the shares has always been a problem since we listed," he said. "There isn't a significant free float. For that reason as much as anything else, we want to keep our contribution [in the equity raise] to a lower level, but it's still a meaningful vote of confidence in the transaction."

He added: "We've always said since we listed that as the years go by and the company gets bigger and requires more equity, we'll be diluted.

"That's what we envisaged would happen and that process I think will continue. There isn't a floor that we're going to say is the bottom and we won't go below that. It's just a matter of what the company requires."

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