Balmoral International Land Goes Private: McCann Family Secures Shareholder Backing Amid Controversy
The McCann family, known for their connection to Fyffes, is moving to fully privatize Balmoral International Land. They received overwhelming support at an extraordinary general meeting (EGM) on Thursday. Nearly 98% of the voting shareholders, predominantly from McCann-controlled groups owning 61% of the stock, approved a buyback of shares from investors with fewer than 25,000 shares.
This buyback affects about 22.4% of the company’s total shares, with many small investors not participating in the vote. After the transaction, the McCann family’s direct and indirect ownership will rise to 79%.
The buyback price is set at €10.50 per share. This is 44% lower than Balmoral’s latest net asset value (NAV) of €18.72 per share. Although the price is 110% higher than the shares’ grey market price from last November, it falls below the recent €12 trading price for a large block of shares.
Some small shareholders expressed dissatisfaction. Colm Whooley labeled the deal as “corporate greed,” arguing that Balmoral is financially healthy and does not warrant such a steep discount. Another shareholder questioned why the company did not consider selling its assets, especially since its investment holdings include industrial properties performing well in the current market.
What are the benefits of Balmoral International Land’s privatization for shareholders?
Exclusive Interview: Insights on Balmoral International Land’s Privatization Plans with Chairman Carl McCann
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NewsDirectory3.com: Thank you for joining us today, Mr. McCann. The recent extraordinary general meeting (EGM) has drawn significant attention, particularly with the well-supported move to privatize Balmoral International Land. Can you elaborate on the driving factors behind this decision to initiate a buyback?
Carl McCann: Thank you for having me. The decision to pursue a buyback was rooted in our commitment to enhance shareholder value while simplifying the structure of our ownership. With nearly 98% of voting shareholders in favor, it clearly indicates strong support, especially from our larger investors who hold 61% of the stock. We believe that by consolidating ownership, we can better navigate the market’s challenges and seize future opportunities.
NewsDirectory3.com: The buyback price has raised eyebrows, being set at €10.50 per share. This is notably lower than the company’s net asset value of €18.72. How do you justify this valuation to concerned shareholders?
Carl McCann: It’s important to consider the broader market conditions. Property stocks, including our own, are currently trading below their NAVs due to various economic factors. While the price may appear steeply discounted, it reflects our attempt to encourage liquidity among small investors and provide them an exit option in a manner aligned with current market realities.
NewsDirectory3.com: Some small shareholders have expressed dissatisfaction, labeling the deal as “corporate greed.” How would you respond to those concerns?
Carl McCann: I understand the concerns raised by some of our smaller shareholders. However, our move was not driven by greed, but by a strategic vision for Balmoral’s future. We are committed to retaining the loyalty of our long-time investors, many of whom supported us through challenging financial times. Dividing the company or engaging in asset sales might undermine the value we’ve built, and we firmly believe that maintaining a cohesive entity is in everyone’s best interest.
NewsDirectory3.com: Analysts have pointed to the potential for the company to consider liquidating certain assets given the strong performance of its investment holdings, particularly in industrial properties. Was this not an option at the forefront of your discussions?
Carl McCann: While liquidating assets can be appealing, our focus remains on long-term growth rather than short-term gains. Our investment portfolio is strategically positioned, and we believe the best path forward is to enhance the overall value of Balmoral through careful management of our assets rather than piecemeal sales that might disrupt our strategic goals.
NewsDirectory3.com: Looking ahead, what’s next for Balmoral as it transitions to fully privatized status?
Carl McCann: Our immediate goal is to complete the buyback process smoothly, ensuring that the transition is beneficial for all stakeholders. Following that, we’ll be focusing on optimizing our property portfolio and seeking new investment opportunities that align with our vision for sustainable growth.
NewsDirectory3.com: Thank you, Mr. McCann, for sharing your insights with us. It’s clear that the McCann family has a long-term strategy for Balmoral. We appreciate your time.
Carl McCann: Thank you for having me. I appreciate the opportunity to discuss our plans and philosophy regarding Balmoral’s future.
Balmoral’s chairman, Carl McCann, defended the buyback price, explaining it reflects the current market conditions, where property stocks are generally trading below their NAVs. He emphasized that breaking up the company would not be attractive to investors who supported it through the financial crisis.
Balmoral, originally called Blackrock International Land, was spun off from Fyffes in 2006 and later delisted in 2011 after a drop in share price. Despite this, it still has many legacy shareholders. The McCann family sold their Fyffes shares in 2017 to Sumitomo. The Japanese conglomerate then sold its stake in Balmoral back to entities controlled by the McCann family.
As of June, Balmoral’s investment assets, which include industrial buildings and offices, increased in value to €146.3 million from €138 million in December.