DUBLIN, June 29 An American fund manager holding
a stake in DCC DCC.I has written to its management demanding
measures to break up the Irish business services company, the
Sunday Times newspaper reported.
ReachCapital, which has built a 1 percent stake in DCC on
behalf of clients, said DCC shares were undervalued due to its
"conglomerate" nature and the distraction caused by a share
dealing case with fruit company Fyffes (FFY.I), the paper said.
DCC (DCC.L) spokesmen were not immediately available to
The fund said it may explore "external alternatives" if the
board does not take immediate steps to maximise shareholder
value. The alternatives could include seeking support from other
funds or soliciting buyers for the company's assets.
"We must insist that the company retains a reputable
investment banking firm and promptly sets forth a plan to fully
monetise the company's assets," ReachCapital Managing Partner
Nigel Hart wrote in a letter to DCC Chief Executive Tommy Breen.
The "monetisation" of assets would be achieved through
spin-outs of DCC's various businesses into separately quoted
companies or the sale of the companies, the paper said.
DCC, whose activities range from distributing liquefied
petroleum gas to manufacturing cosmetics, in April paid 41
million euros ($64.5 million) to settle a share dealing case
with Fyffes, prompting the exit of chairman Jim Flavin in May.
Ireland's Supreme Court ruled last July that Flavin held
price sensitive information in 2000 when the company sold a
stake in Fyffes a month before it issued a profit warning.
Fyffes brought the case against DCC and Flavin, who was a
director of Fyffes at the time.
Flavin, who founded DCC in 1976, resigned after the Irish
Director of Corporate Enforcement, which has the power to
prosecute persons for suspected breaches of the Companies Acts,
said it wanted to start a new investigation into the case.
(Reporting by Andras Gergely; Editing by Ruth Pitchford)