Tuesday 24 October 2017

Eason's strategic review may lead to €60m sale

Tom Lyons

The board of Eason, the books and stationary retailer, will tell its shareholders next week it plans to carry out a corporate structure review to "maximise shareholder value".

The move is seen by some of the firm's 200-plus shareholders, as having the potential to lead to it being sold for over €60m. Sources close to the company disputed this interpretation and said the review was only intended to modernise the 127-year-old company's corporate structure.

In a note to shareholders ahead of Eason's annual general meeting next week, chairman James Osborne said: "The company has undergone significant operational restructuring over the last two years and the board believes that in the best interest of shareholders, a corporate restructuring review should be completed.

"The purpose of this review will be to explore a range of options to maximise shareholder value," he added. Mr Osborne said he would stay in close contact with shareholders on this matter to update them on the "outcomes and recommendations," of this process.

Eason will also update shareholders on its improved financial performance, which saw the company return to profits last year of €2.6m after making a loss of €5.3m the previous year. The company plans to pay its shareholders a dividend of €500,000 or 50 per cent less than the previous year.

The company is also working on a plan to deal with the deficit in its superannuation pension scheme, which has been hit by the rising cost of annuities.

Group turnover fell, however, by eight per cent to €245m but the company is expanding its franchise operations to help to reverse or slow this decline.

Some shareholders believe the company, having weathered the recession and returned to profit, should now seek a liquidity event.

In the past, significant shareholder blocks in Eason have expressed dissatisfaction with its financial performance but this has eased since four new directors were appointed to the board of Eason.

Irish Independent

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