Shares in Greencore surge as Desmond sells his 22pc
SHARES in the food group Greencore surged ahead by 11pc after stockbrokers NCB sold a block of 42 million shares representing a 22pc stake in the firm.
Greencore declined to comment on the sale, but market sources said the block of shares had been sold by IIU Nominees, the investment vehicle controlled by financier Dermot Desmond. IIU did not reply to confirm the sale of its stake yesterday.
Mr Desmond's company was the largest single shareholder in Greencore and was also influential in ensuring that it undertook the huge debt reduction programme in the wake of its acquisition of Hazlewood Foods five years ago.
IIU has held a 22pc stake in Greencore since October 2003, when it acquired a block of over 11m shares.
By then the company had spent about ?100m acquiring its stake.
The block of shares sold yesterday was priced at ?4.05 a share, a steep 9.5pc premium to the previous closing price.
Based on the 42 million shares sold yesterday this would have grossed IIU approximately ?170m, giving the company a tidy ?70m odd profit on its investment - the block would also have attracted dividends over the intervening years.
On the markets the immediate reaction was to drive the stock ahead, with the shares trading up to ?4.17 at one stage during the afternoon.
The financier's other major interests include the ebetting exchange Betdaq an London's City Airport, which he is in the process of trying to sell.
Last month, Greencore posted a 14.3pc rise in first-half profit after tax and said it would focus on its convenience foods business to deliver a good full-year performance.
It is also expected to benefit from lucrative property deals as it restructures is agribusiness.
Greencore's former sugar processing plants in Carlow, Mallow, Wexford and Thurles have been valued at a total of ?187m, provided the Carlow site is rezoned.
The firm exited its Irish sugar processing business earlier this year because of price-slashing European Union reforms. It now mainly supplies retailers in Ireland and Britain with convenience foods such as sandwiches, soups and sauces.