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Comment: Greencore won’t give up on property
29 November 2009
Once you have been bitten by the property bug, it can be hard to know when to give it up. Sometimes, you just need to leave it alone.
Greencore showed slight symptoms of this particular disease with the inclusion of a property update tagged onto the end of its financial results statement last week. Under the heading of ‘Property’ on the last page of the statement, the company said the outlook for Irish property was ‘‘poor in the medium term, with an excess of supply of zoned land and a weak bank lending environment’’.
Greencore said it continued to remediate and ‘‘land bank’’ its Carlow and Mallow sites for the foreseeable future. These were a major factor behind Liam Carroll’s decision to buy 29 per cent of Greencore.
However, it went on to say that the prospects for the Littlehampton site in Britain were ‘‘somewhat more positive, with house prices no longer on a deflationary track and recent evidence of a recovery in transactions’’.
The convenience foods company then went on to say that the consortium, of which it owns 68 per cent, was on track to lodge a planning application for 1,600 residential units before the end of 2009, with a planning decision expected before the end of next year.
It may be correct about signs of an improvement in the British housing market, but surely it’s time to stick to the sandwiches and sauces.
Dragon Oil’s Dubai dilemma
Institutional shareholders in Dragon Oil have been rallying against majority shareholder Enoc’s (Emirates National Oil Co) offer of 455p a share, claiming that this undervalues the company.
Now proxy shareholder agency Manifest has rowed in on the issue, raising concerns about the independence of the ‘independent committee’ which recommended the deal.
It’s a small world in the oil business, and Enoc is owned by the Dubai government.
Essentially, Manifest feels that there are too many links between the independent committee and the Dubai government. Manifest said that a non-executive director, a Mr al-Muhairbi, has been involved with Margham Dubai Establishment, a wholly Dubai governmentowned company.
Another non-executive director, a Mr al-Mazrooei, is deputy vice-president of Operations at Dolphin Energy, which has signed a memorandum of understanding with the Dubai Supply Authority to provide gas from its fields in Qatar.
Meanwhile, committee member Nigel McCue stands to gain stg£1.1 million from the exercise of options in the company and subsequent sale of the shares at the bid price.
Ballie Gifford, the largest minority shareholder, Master Capital and Carmignac Gestion have all rejected the current offer, but Dragon Oil has said it won’t increase the price.
The buyout is to be conducted through a scheme of arrangement, and Enoc has stated that it will not vote at the meeting to approve the scheme.
If 12.125 per cent of the remaining shareholders vote against this, the bid will fail an outcome which looks increasingly likely.
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