Canadians hold the key as CapVest makes play for plastics firm One51

A BID by UK private equity firm CapVest for Irish plastics business One51 hinges on an agreement with the Canadian shareholders in the company.

Sources familiar with the Canadian shareholders — CDPQ , an institutional investor which manages funds for the Canadian public sector, and FSTQ, a Canadian government agency which supports investment in Quebec — believe that they are unlikely to exit One51.

CapVest, which is led by Irishman Seamus Fitzpatrick, would need to get the backing of the Canadians before buying out the remaining shareholders, which include several co-ops and beef baron Larry Goodman.

The deal being offered by CapVest is €2.50 a share, well above the last traded share price of €2. One51 had been proceeding with a complex restructuring of the company to clear the way for a listing.

In July 2015, One51 acquired a majority shareholding in Canadian plastics company IPL, with CDPQ and FSTQ taking minority stakes. The current plan involves swapping their 33pc stake in IPL for a direct stake in One51.

They have frequently been described as long term holders of One51 and will have a particular interest in protecting the jobs of Canadian workers.

Sources said that Fitzpatrick may have to give assurances to the Canadians to get their agreement but that he in turn would expect to be left to run the business without interference.

Fitzpatrick previously attempted to buy One51 in 2015.

However, another large shareholder, businessman Dermot Desmond, scuppered the plans when he began increasing his stake and ultimately built up a holding of almost 25pc, effectively blocking the CapVest approach.

Last May, Desmond sold that stake to CDPQ. After the planned corporate reorganisation, the Canadians would hold around 40pc of the company.

In an investor presentation, One51 said it believes that the corporate reorganisation puts the company in the best position to realise value, be it through an IPO or third-party approach.