Dunloe Ewart plc

Friday, 15 November 2002


 Panel Ruling

 Proposed offer by Valdot Limited for Dunloe Ewart plc (“the offer”)

 Valdot Limited (“Valdot”), a company controlled by Mr. Noel Smyth, released a Rule 2.5 announcement on 25 October, 2002 announcing a firm intention to make a cash offer at 42.5 cent to the shareholders of Dunloe Ewart plc (“Dunloe”).  The Panel has considered a request dated 5 November from Valdot to be permitted not to proceed with the offer.

In considering this request, the Panel has had regard to the following circumstances which have arisen since the release of Valdot’s Rule 2.5 announcement:

(i)  (a)    Mr. Dermot Desmond and Mr. Philip Monahan, or bodies corporate associated with them (such persons currently holding in aggregate approximately 23.5% of the shares in Dunloe), have, on 4 November, 2002, jointly requisitioned an extraordinary general meeting of Dunloe for the purpose, inter alia, of removing Mr. Smyth and other named directors as members of the board of directors of Dunloe;

(b)    in a press release dated 4 November, 2002 Messrs. Desmond and Monahan have stated their intention, subject to removing the existing board of Dunloe (with the exception of two executive directors) at an extraordinary general meeting and replacing them with new directors, that such new directors will propose to use the existing surplus cash resources of Dunloe to buy back shares at 50 cent per share and to sell the remaining assets at the best possible price for the benefit of all shareholders.

(c)    the Panel has been informed by the directors of Dunloe that it is likely that the requisitioned extraordinary general meeting will be held on a date between 9 and 20 December, 2002 and that it is Dunloe’s intention that a circular will be posted to Dunloe shareholders no later than 22 November, 2002;

(ii)   the Panel was informed on 14 November that an agreement exists between Mr. Smyth and Mr. Paschal Taggart (albeit subject to Panel consent) whereby Mr. Taggart will purchase shares representing 26.1% of the issued share capital of Dunloe held by Mr. Smyth and his family at a price of 45 cent per share and that it is proposed to complete such sale in the week commencing 18 November;  and

(iii)  the current shareholdings of the major shareholders in Dunloe and the increase in certain of those shareholdings through market purchases at prices in excess of Valdot’s offer price of 42.5 cent per share during the offer period.

The Panel has also noted that the independent directors of Dunloe have stated to the Panel that, provided the Panel is satisfied that the acceptance condition to Valdot’s offer cannot be satisfied, the independent directors are of the view that there would appear to be no purpose in the Valdot offer document being posted.  The Panel is unable on the basis of the information provided by Valdot and the independent directors of Dunloe to make such an assessment.

In considering this matter the Panel has also had regard to the General Principles and in particular General Principle 3 which states that no offer shall be made and no announcement of a proposed offer shall be made save after careful and responsible consideration of the matter by the offeror and its advisers and only if the offeror and its advisers are satisfied that the offeror will be able to implement the offer if it is accepted.

The Panel does however consider that the requisition of the extraordinary general meeting referred to in (i)(a) above and the matters stated in (ii) and (iii) above constitute exceptional matters and the Panel therefore consents to the request that Valdot should be permitted not to proceed with its offer.  In such circumstances, it is not necessary for the Panel to give its consent to the proposed sale of shares referred to in (ii) above.

In the event that the proposed extraordinary general meeting has not been convened in the manner or within the timeframe set out above or the sale of the shares referred to in (ii) above has not being completed within the period stated, the Panel reserves the right to review its decision and require Valdot to proceed with the making of the offer to Dunloe shareholders.

A copy of this ruling will be posted to Dunloe shareholders on or before 22 November 2002.

 15 November, 2002