A group of minority shareholders in Ardagh Glass Limited have asked the London Takeover Panel to intervene in their dispute with the Jersey-based company.
The panel is currently investigating whether…
A group of minority shareholders in Ardagh Glass Limited have asked the London Takeover Panel to intervene in their dispute with the Jersey-based company. The panel is currently investigating whether it has jurisdiction according to lawyer John Collins of Donal Reilly & Collins, representing the shareholders. In some circumstances the Takeover Panel has jurisdiction over Channel Island companies that have previously been quoted. Ardagh Glass is the subject of a takeover by Caona plc, a company controlled by its largest shareholders, the businessman Paul Coulson and his investment company Yeoman, which controls 41% of the group. The shareholders Mr Collins represents claim that the directors of Ardagh Glass had a duty to all the shareholders of the company and should have advised shareholders on the fairness of the EUR 4 per share being offered by Caona. Ardagh and Caona claim that the directors are not obliged to do so under Guernsey law and that the onus is on shareholders to form their own opinion. If the transaction comes under the jurisdiction of the Takeover Panel, then the directors would be required to meet to consider the valuation under its rules, according to Mr Collins. A spokesman for Ardagh said 3 April 2005 that the “UK Takeover Code does not apply to Ardagh”. In a letter to Mr Collins, the solicitors acting for the Ardagh directors state that “these matters were for the shareholders of AGL and the board of AGL was not involved in the consideration of the offer or the value of the shares in AGL, nor had any obligation to be so involved”. Over 99% of the shareholders have accepted the offer, including most of the shareholders represented by Mr Collins. The dissident shareholders have accepted the offer to mitigate their losses pending the outcome of the challenge, according to Mr Collins. An Extraordinary General Meeting of Ardagh was scheduled to take place in Guernsey on 4 April 2005 at which a motion to compulsorily acquire the outstanding shares was to be considered. The dissident shareholders were informed that they would not be admitted to the meeting as technically they no longer qualify as Ardagh shareholders as a result of their acceptance of the Caona offer. The shareholders represented by Mr Collins claim that the EUR 4 offered by Caona does not fully reflect the value of the company. A prospectus issued by Caona for a EUR 125 million fundraising associated with the bid for Ardagh puts a value of around EUR 4.40 a share, they claim. They also allege that they are not being allowed to participate in Caona on the same terms as the large shareholders. On completion of the transaction, Yeoman will hold 45% of the company and Mr Coulson (who owns 33% of Yeoman) will hold 25%.