| M&A Deal Directory 2003 |
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| Deals in excess of €10m |
Apple Oil & Gas
Acquirer: Apple Oil & Gas
Target: Aminex plc
Acquirer advisor: Seymour Pierce
Target advisor: Davy Corporate Finance Limited
Acquirer legal advisor: Arthur Cox
Target legal advisor: Ashurst Morris Crisp
Origin of target: Irish
Origin of acquirer: BVI
Date of announcement: 01/03/02
Date of completion: 05/02 (Lapsing of Offer)
Consideration: &euro:40 million (based on market cap of Aminex immediately prior to announcement).
It is unusual to see hostile bids for small companies and thus this was a significant deal from an advisory perspective, if low-profile in stock market terms. A successful defence was conducted against a hostile bid that was deemed to be an opportunistic attempt to get access to the significant cash balance in Aminex plc, a small Irish registered oil exploration company.
Apple was an unlisted BVI-registered company without any significant trade or assets that attempted to gain control of Aminex by virtue of a paper for paper offer. The proposal was rejected by the Aminex board, which was then subjected to a hostile bid by Apple, involving several rounds of shareholder documentation.
The Aminex board successfully argued that the Apple share and complex loan note structure masked significant value destruction for Aminex shareholders and that it would ensure significant transfer of value to existing Apple shareholders. Eventually the bid lapsed as few Aminex shareholders were persuaded by the merit of the Apple bid.
Profile by: Ivan Murphy.
Dunfermline Press Limited
Acquirer: Dunfermline Press Limited
Targets: Meath Chronicle
Acquirer Advisor: Self advised
Target Adviser: Merrion Corporate Finance
Acquirer Legal Adviser: Burness (Scotland) / Arthur Cox Solicitors
Target Legal Adviser: Brian O’Donnell & Parners
Origin of Acquirer: Scotland
Origin of Target: Ireland
Date of Announcement: 12/02
Date of Completion: 12/02
Consideration: &euro:30.5 million
Merrion Corporate Finance acted as advisor to Meath Chronicle Limited on its sale to the Scottish newspaper-publishing group, Dunfermline Press Limited for a consideration in excess of &euro:30.5m. The Meath Chronicle has been in existence for over 100 years and is made up of a leading regional weekly press title and a contract printing business. The acquisition represents the Scottish group’s first venture into the Irish market and its first purchase outside Britain, where it owns titles in both Scotland and England.
Merrion was engaged by the Meath Chronicle to advise the company and its shareholders on all aspects of the sale process. Initially, Merrion prepared an information memorandum on the company and engaged in discussions with all potential acquirers of the business in Ireland, UK and internationally. Merrion also managed the bidding process and performed a financial and commercial analysis of all offers culminating in the recommendation to the Meath Chronicle Board of a single offer - that of Dunfermline Press. Merrion then project managed the transaction to completion in less than 35 days.
Profile by Pat Landy.
Ulster TV plc
Acquirer: Ulster TV plc
Targets: Treaty Radio, Lite FM, County Media (40 per cent minority)
Acquirer Advisor: Goodbody Corporate Finance
Target Adviser: IBI (Treaty)/Merrion (Lite)
Acquirer Legal Adviser: Arthur Cox
Target Legal Adviser: MOP/ Harrison O’Dowd (Treaty)
Origin of Acquirer: Northern Ireland
Origin of Target: Ireland
Date of Announcement: n/a, 8 April 2002 (Treaty), 23 December 2002 (Lite)
Date of Completion: 8 April 2002 (County Media), 25 June (Treaty), 23 Dec 2002 (Lite)
Consideration: &euro:16 million for Treaty Radio, &euro:14m for Lite FM
The acquisitions of Treaty Radio and Lite FM represent important steps in the implementation of UTV’s stated strategy to expand its media interests on an all-Ireland basis. In addition, in April 2002, UTV acquired the 40 per cent minority in County Media, giving it 100 per cent ownership. These acquisitions give UTV local radio stations in the main urban centres of Ireland.
Goodbody Corporate Finance has worked closely with UTV over the last three years to develop its all-Ireland media strategy. It has been the most prolific acquirer of independent radio stations and, through acquisition, has created a national network of local stations. Goodbody Corporate Finance also advised UTV on its acquisition of a strategic stake in Bocom in early 2002.
UTV is an important participant in the Irish radio market with a strong local focus and a commitment to the development of the Irish broadcasting market as a whole. As a well-resourced Irish media group with brand leadership in key regions, the enlarged UTV Group is in an even stronger position to compete effectively against its rapidly consolidating UK and international media peers.
The acquisitions were financed from UTV’s existing cash resources and new bank facilities.
Profile by: Bobby O’Brien.
One of the most interesting private company deals of 2002 was the acquisition of Treaty Radio Limited in Limerick by UTV plc. This deal was an example of the continuing consolidation in the Irish radio sector since the liberalisation of ownership regulations by the BCI in October 2001.
At a valuation of approximately twenty times EBITDA* it also illustrated the strong interest from acquirers in the larger radio stations, given that the current ownership guidelines place restrictions on the number of stations one party may own but does not place any restrictions on the size of those stations.
Local radio stations are likely to continue to remain attractive to acquirers due to their strong position in their local markets and relatively stable earnings streams. As a result of these factors, Treaty Radio was sold for a strong price, despite the fact that the advertising sector was going through a moderate downturn at the time the deal was completed.
M&A activity in the media sector is likely to focus on the newspapers in the short term, due to the two year ban on changes in radio ownership imposed by the BCI following licence renewal. However, once this period expires activity is likely to resume, particularly as some of the larger local stations, for instance in Dublin, continue to remain in independent hands at present.
*Earnings Before Interest, Taxation, Depreciation and Amortisation.
Profile by: Leo Casey. |
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| Article appeared in the March 2003 issue.
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