McCann Family to Take Balmoral International Land Private
The McCann family, known for their long association with Fyffes, are embarking on a plan to take Balmoral International Land private. This move will see the family’s combined stake in the company rise to nearly 80%.
Grey Market Trading and Buyback
Balmoral, which was delisted from the Dublin Stock Exchange in 2011, has been trading on a grey market operated by stockbrokers. Last week, the company issued a circular to shareholders announcing a mandatory buyback of shares held by investors owning less than 25,000 shares. This represents a combined 22.4% stake in the company.
The buyback offer is priced at €10.50 per share, a significant 110% premium to its last grey market price in November. This follows a period where stockbrokers ceased facilitating trades due to administrative burdens. Balmoral clarifies that rejoining the stock market is not a realistic prospect in the foreseeable future.
Valuation and Shareholder Impact
While the buyback price represents a substantial premium to the grey market, it is only 56% of Balmoral’s reported net asset value per share of €18.72 as of June 2023.
The total cost of the buyback is €18 million, equating to the company’s current net cash position. This buyback will increase the direct and indirect McCann family stakes, through controlled vehicles, to a combined 79% from the current just over 61%.
Shareholder Structure and Rationale for Buyback
Balmoral highlights that it has an unusually large number of shareholders for a company of its size, with nearly 5,000 investors, or 95% of the total, holding less than 500 shares. Many inherited stakes have become uneconomical to trade.
Balmoral Chairman Carl McCann states in the circular, “The company continues to receive enquiries from shareholders who are keen to understand how they can unlock the value in their shares now that there is no active market in the company’s shares.” He also points to the company’s cash distribution to shareholders in 2023 and additional property sales which have resulted in a net cash position.
Next Steps and Background
An extraordinary general meeting to approve the buyback will be held on November 21st. While this is a formality, as 80.4% of shareholders have already given irrevocable undertakings to vote in favor.
Originally named Blackrock International Land, Balmoral was spun out by Fyffes in 2006. It was delisted in 2011 following the property crash but retained thousands of legacy shareholders.
The McCann family sold their long-standing Fyffes shares to Sumitomo in 2017. Sumitomo subsequently sold its 30% interest in Balmoral to a vehicle controlled by the McCanns.
Carl McCann is also executive chairman of Dole Plc, the Irish-based but New York-listed fresh produce company formed in 2021 through the merger of Dole Foods with former Total Produce. Both Dole and Fyffes are major tenants of Balmoral.
Balmoral’s investment assets, comprising industrial and warehouse buildings, offices, and mixed-use land, have increased in fair value to €146.3 million in June from €138 million in December, according to the company’s disclosures.
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