TVC to shut up shop; blames lack of investment opportunities
INVESTMENT group TVC is effectively shutting up shop because it can't find any Irish companies to invest in, management said yesterday.
The country's only indigenous listed investment group outside of property trusts has announced plans to distribute more than 90pc of its assets to shareholders and delist from the Dublin and London stock exchanges by July.
The move must first be approved by shareholders at the group's upcoming AGM. Five of TVC's six staff will be made redundant.
Shareholders will receive a mixture of cash and shares in Northern Irish broadcaster UTV, valued at €0.95 per share. It has a cash pile of €67.3m after selling a variety of investments in the last year, including its stake in the Dalata Hotel Group.
Rumours of an effective closure have been circulating for some time. The news comes less than a year after TVC paid out a generous special dividend of €45.3 per share.
There are no suitable companies to continue investing in, chairman Shane Reihill said.
"We cannot find what we believe to be value-enhancing investment opportunities," added Mr Reihill, who owns about 30pc of TVC, discussing the decision yesterday at a media briefing.
TVC's targets, Irish companies valued at more than €10m in any sector other than property or biotechnology, are overpriced, he said.
There is too much investment chasing too few deals, Mr Reihill said, highlighting the rake of new investment funds it is now competing with including Carlisle, Cardinal, Blue Bay, Better Capital and Lone Star. Many of its competitors are backed by the state.
"There is hundreds of millions (of euro) chasing a very small number of transactions. The likelihood is you will get fewer returns."
The indigenous software industry has slowed down, he added.
Mr Reihill denied that the decision to wind down now is a blow to UTV, in which it still has a 10pc stake after selling off nearly half its holding in February.
UTV rolled out an ambitious turnaround strategy in recent months, winding back on its digital marketing activities and refocusing on broadcasting with the launch of a Republic-only channel next year.
"We're pleased with UTV," he said, adding that TVC broadly supported the broadcaster's new strategy.
He also spoke warmly of the Dalata Hotel Group. TVC sold its entire stake in Dalata for €30m in March, days after the hotel management business went public and raised €265m to buy rather than just manage hotels.
"We have always stated we weren't going to do property or biotech," said Mr Reihill, adding that fundraising of €265m by a company of Dalata's size was "phenomenal".
The 9pc of TVC that will not be immediately distributed to shareholders is mainly tied up in technology company CR2 and several short-term leases. The CR2 stake will be wound down over a number of years, according to contractual obligations.
"We're not in any hurry," Mr Reihill said.
TVC's winding down was announced alongside its latest annual results for the 12 months to March 2014, which revealed a profit of €33m before tax compared to €6.6m the year before.