Several significant shareholders in Irish Continental Group (ICG) are opposing a proposed €1.2 billion management buyout led by CEO Eamonn Rothwell. The investors, including Marathon Asset Management, which holds a 4.1% stake, and Janus Henderson with 2.1%, argue that the offer undervalues the company. They expressed their objections in a letter to the company on Wednesday, according to sources. Other dissenting shareholders include Pageant Investments, Equus Global, and Oxy Capital, collectively owning nearly 11% of ICG. However, these investors are acting independently and are not coordinating their efforts.
Buyout Details
The management's bid, which was announced late last month, offers €8 per share, representing a 28.2% premium over ICG's closing price on July 24, shortly before the announcement. Rothwell, who owns 21.7% of ICG, has attempted a management buyout previously, but that effort failed 19 years ago. The company stated that the enterprise value of the bid reflects 9.8 times the group's earnings before interest, tax, depreciation, and amortization (EBITDA) for 2025. However, dissenting shareholders contend that this EBITDA figure does not accurately represent the company's potential, citing disruptions on its main route between Dublin and Holyhead as a factor.
Shareholder Concerns
Some investors also pointed out that ICG's net debt of €256 million at the end of 2025 marks a peak level of borrowings, following a recent acquisition. They believe that the current valuation does not capture the benefits of a capacity-sharing agreement with P&O on the Dover to Calais route. The ongoing opposition from these shareholders raises questions about the future of the buyout and the company's strategy moving forward.
Related coverage: L&G Shares Drop 1.7% After Citi Downgrade to Sell Rating.
The opposition from major shareholders could create volatility in ICG's stock price, particularly if the management buyout faces significant hurdles. Investors are likely to monitor the situation closely, as the outcome may influence broader market sentiment regarding management-led buyouts in the sector. Watch for further developments as ICG addresses shareholder concerns in the coming weeks.
Based on reporting by: irishtimes.com