The much publicized and controversial bid from an Argentine group to acquire a leading position in the Falkland Islands Holdings, which owns the Falkland Islands Company, closely linked to the Islands' history and economy, has been considered “a real hazard” by FIH directors.
In effect having considered a rival approach to acquire FIH Group by Dolphin Fund, independent Directors consider such a deal as unwelcome and seriously threatens to undermine the FIC business and the interests of its employees.
The Independent Directors of FIH (being John Foster and Jeremy Brade, who are independent to the initial bid from Staunton Holdings) note the recent unsolicited approach by Dolphin Fund and its beneficial owner Mr. Eduardo Elsztain, an Argentine citizen, and have considered Dolphin's request for access to information on FIH.
They have released the following statement: Having taken appropriate soundings and duly reflected on the approach, and noted reports that the approach is causing consternation in the Falkland Islands, the Independent Directors believe that the prospect of Argentine-related control of the Falkland Islands Company (FIC”), a subsidiary of FIH which has operations based solely in the Falkland Islands, seriously threatens to undermine the FIC business and the interests of its employees.
The Independent Directors also note that the Falkland Islands Government (FIG”) has the power to grant or withhold licenses to own assets and land in the Islands, including the licenses that FIC currently holds. FIG has stated that it is closely monitoring the situation and will scrutinize any proposed change of ownership for compliance with Falkland Islands Law.
Accordingly, the Independent Directors regard the Dolphin approach as unwelcome and posing a real hazard to FIH. They are not required to provide Dolphin with information on FIH and are not prepared to enter into discussions with Dolphin. They oppose the approach as unwelcome, as in their view it is entirely incapable of serving the best interests of FIC, FIH and its shareholders.
Dolphin had written to the Board of FIH Group plc asking for information to enable it to evaluate making a cash offer for FIH, at what Dolphin said would be a significant premium to the current offer of £3 per share made by Staunton Holdings Limited.
The original bidder for FIH, Staunton Holdings Limited, is a company linked to the Rowland Family, of which FIH Chairman Edmund Rowland is a member. He is the son of Tory controversial donor David Rowland.
Another company linked to the Rowland Family already owned 22.65% of FIH and Staunton owns another 2.34%, while Dolphin currently owns 2.54%, according to information in the UK media.
When the operation surfaced, a Foreign Office spokesman said: “This is a commercial matter between two companies and not for the Foreign Office to comment on”.
However last week from Stanley the Falklands' government said that while it is a matter for shareholders to decide, ”the Government continues to closely monitor the status of Dolphin Fund’s potential bid”, since any proposed change of ownership affecting assets in the Islands, “will be scrutinized for compliance with Falkland Islands Law”.
FIH traces its roots to 1852 when its subsidiary, the Falkland Islands Company, was granted Royal Charter status. The company now also owns an art dealer and the Portsmouth Harbor Ferry Company.