Minority shareholders in flat and bent glass producer Darby Group, listed on the UK Alternative Investments Market, are angry that the company“s largest shareholder has given his support to a takeove…
Minority shareholders in flat and bent glass producer Darby Group, listed on the UK Alternative Investments Market, are angry that the company“s largest shareholder has given his support to a takeover bid launched by a company in which he also has a holding. Swedish investor Peter Gyllenhammar joined the board of Darby in 2001 shortly after increasing his holding to nearly 30%. He has given his irrevocable support to a GBP 0.27 share bid launched for Darby by Jarvis Porter. Jarvis Porter is a cash shell after selling the last of its labels businesses in 2002. It has cash reserves of GBP 11 million. Jarvis Porter“s biggest shareholder is Montpellier, composed of a construction and property company, and an investment arm. Montpellier in turn is majority controlled by a private Swedish investment company, Fortvaltnings AB Browallia, which is 50% owned by Mr Gyllenhammar. Between Mr Gyllenhammar“s irrevocables and further letters of intent representing 18.51%, Jarvis Porter had the support of 48.41% of Darby“s shareholders before it formally launched its bid, reported on GlassOnline on 28 March 2003. If Jarvis Porter is successful in its approach, it plans to delist the company. Darby“s independent directors are not recommending the GBP 0.27 offer because they believe it undervalues the company. However, Stephen Bannister, finance director, emphasised the approach was “friendly”. Mr Bannister said that although the company knew of Mr Gyllenhammar“s reputation before they invited him on the board, they had not anticipated him backing a takeover. “We knew him as an active investor in a number of companies – small cap, old economy stocks – in the north.” Through his private investment arm, Mr Gyllenhammar has taken control of a number of textile companies in the north of the England. Montpellier has followed a complementary strategy of taking interests in companies it believes to be undervalued, but on a wider geographic basis. In its annual report, it says: “We identify businesses with market values significantly below both asset value and underlying potential value. We are willing to commit ourselves by investing our own funds in acquiring a meaningful stake in the business. We then assist and support management in turning the business around.”