Wednesday 24 January 2018

Uniphar top bosses head for bumper bonus plan

Investors concerned over dilution as €20m share placement looms

MAN AT THE HELM: Uniphar chairman Maurice Pratt has been at drug firm four years
MAN AT THE HELM: Uniphar chairman Maurice Pratt has been at drug firm four years
Nick Webb

Nick Webb

Former Tesco chief Maurice Pratt's management team at drug wholesaler Uniphar may end up with a major stake in the company following the upcoming €20m share placement.

It is understood that the board of the company will invest €5m with an external investor plonking down €7m. Existing shareholders will be invited to invest the remaining €8m in blocks of €100,000 each. Uniphar and advisers Davy will gauge investor demand and may increase the offering to €25m. The offer is not being underwritten.

Uniphar documents also detail a bumper private equity-style bonus scheme introduced for chief executive Ger Rabbette and his team. Subject to hitting certain targets in relation to profit and debt ratios, the key executives could net as much as 7.5 per cent of the company.

However, some shareholders in the €1bn per year drug firm are in a militant mood as Uniphar management undertakes an investor roadshow to sell the deal. Shareholders, primarily pharmacists, will face Mr Pratt and his management team in Uniphar HQ this Wednesday. Existing shareholders will be massively diluted under the share placement.

The valuation of the new shares, at 30 cent each, technically values the company at under €10m. Several months ago, Uniphar spent about €50m to buy its close rival CMR, which catapulted it into second spot in the Irish market. The shares in Uniphar, which operates an internal market, touched €7.10 each in 2008. However, the company suffered after the collapse in the property market and the decision by the then health minister Mary Harney and the HSE to effectively slash pharmacists' margins.

Uniphar has agreed a four-year banking facility of up to €122m with Ulster Bank and Bank of Ireland. This expires in May 2017.

Uniphar is to pay €15m from the proceeds of the capital raising to its bankers by November as part of its debt restructuring programme.

Maurice Pratt, who chaired Bank of Scotland (Ireland) during the boom, has been Uniphar chairman since 2009. The former Tesco boss also ran cider group C&C before departing after a strategic wobbler saw the share tank.

Uniphar did not comment when contacted by the Sunday Independent.

Sunday Independent

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