Tuesday 12 December 2017

Buyout battle for €500m ICG to kick off again

Ferry company's shares have risen 20% this year

Nick Webb

Nick Webb

Bankers are thought to be pitching a new €500m-plus buyout of listed ferry firm Irish Continental Group headed by combative former stockbroker Eamonn Rothwell.

Shares in the ferry company have risen close to 20 per cent since the start of the year. Earlier this year Bloxham Stockbrokers highlighted ICG as one of its top takeover or merger targets for the year.

Last week, Mr Rothwell ramped up the pressure on dissident shareholder Moonduster -- a consortium made up of Philip Lynch's One51 and Doyle Shipping Group -- by announcing a modest dividend of one euro per share. Rothwell did not comment last week.

Despite increasing profits by 61 per cent on last year and bagging €38m from the sale of the 'Pride of Bilbao' ferry to Russian outfit St Petersburg line, the dividend was the same as last year.

The Moonduster consortium will receive about €6.1m for its 24.5 per cent stake in the firm. Rothwell and an associated company, Rokeby, own 15.8 per cent of ICG and are in line for €3.95m in dividends.

This puts increased pressure on Mr Lynch's private equity firm One51, which is mid-way through an important refinancing as it tries to cut its debt burden, according to dealmakers.

The most recent figures for One51 show that it had net debts of €164m at the end of 2009. It is understood that Mr Lynch has made a significant dent in this figure. Moonduster's stake in ICG is worth close to €110m. One51 has already written down the value of its shareholding by over €20m over the last three years.

Financiers have also cited Philip Lynch's lawsuit against AIB and his advisers over a €25m property loan as a trigger for activity over the Moonduster stake.

A lengthy takeover saga involving separate and joint bids from Rothwell and Moonduster was complicated by the arrival of developer Liam Carroll, who bought up 29 per cent of the company. However, when Mr Carroll hit the skids his stake was sold off by the banks. Moonduster had tried to buy some of these shares but was unsuccessful, leading to a cooling of relations between Rothwell and Moonduster.

The ding-dong buyout battle was ultimately ended by the Takeover Panel that ruled that the key players could not make another bid for the firm for a defined period of time. that lock-out barrier ended last April.

"With Liam Carroll out and Lynch having problems, it's come back his [Mr Rothwell's] way again," according to one financier.

However, bankrolling a company which is highly exposed to the economy is not straightforward. The roster of banks that were wrangled together for the last run at the company have thinned. Bank of Scotland (Ireland) has exited and AIB is in lockdown. Only Bank of Ireland and Barclays Bank are still in the market.

"It's an infrastructural play, which helps. Although oil prices have come against it in recent weeks. Infrastructure still tends to get funded. Also it's not a new project. this was up before so there'll be a certain familiarity about it," according to one market source. It is thought that any approach for the company might involve a loan note or some form of warrants as well as the main cash element.

Goodbody Stockbrokers, which advised Mr Rothwell on his last attempt to buy the company in 2008, declined to comment.

Sunday Indo Business

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