It is a well-worn phrase that when it comes to investments, timing is everything. Property development is no different. It is about good judgement; knowing the risks, the state of the market, the availability of finance, when to buy, when to sell.

It is a skillset Citywest developer Davy Hickey Properties (DHP) prides itself on – anticipating market peaks and downturns.

Take the 2008 economic crisis. Whether it was business acumen, luck, or a combination of the two, DHP came through the dark years bruised but unbroken having fortuitously shed a significant chunk of its portfolio on the precipice of the crash.

Now after more than 30 years in business, a thriving DHP has decided the time is right to cash in all of its chips. The company is in wind-down mode, with assets being sold off for the benefit of its ageing investors, many of whom have been there since the start.

The register of shareholders is a roll call of Irish business savvy and wealth including billionaire Ardagh chair Paul Coulson, Glen Dimplex founder Martin Naughton, ex-Davy stockbrokers Brian Davy, David Shubotham and Kyran McLaughlin, and property heavyweights Brendan Hickey and Hugh Lynn.

The idea is clearly to go out on a high while the market is strong. Already since March 2017, around €200 million in properties and development sites have been sold. And despite Covid-19, the pace of disposal remains steady.

The last few weeks alone has seen Davy Hickey place two residential development opportunities on the market at Citywest. First up was Mountview, a nine-acre site near Fortunestown Luas stop, that came with planning permission for 90 houses and 20 apartments and an €8.5 million guide price that is understood to have been surpassed. Before bids closed on Mountview, Davy Hickey took the unusual decision of putting up for sale a competing greenfield residential site in Citywest called the Northern Quarter.

Again it was all about timing, demand and to an extent politics, specifically the negative press that surrounded global investment firm Round Hill Capital squeezing out first time buyers with its acquisition of 112 houses in a new estate in Maynooth, Co Kildare. In May, real estate advisors Jones Lang LaSalle warned DHP that the significant negative publicity meant the political climate for residential development was likely to get worse. “We are hearing rumours of increased stamp duty levels, potential changes to VAT and amendments to the planning system which could be disadvantageous to the value of the land,” its chief executive John Moran advised.

As the saying goes, there was method in the madness.

But not everyone is on board with DHP’s exit strategy – despite it being approved at the company’s AGM last December. While the majority of members passed a resolution to transfer the company’s asset base from the Isle of Man registered DHP to a new company Oviedo as part of the process of winding down the business and realising the full value of the group’s assets, a strong minority contingent (33.7 per cent) led by Shubotham and Coulson voted against the move through their shareholder block Fulman Holdings, a Luxembourg registered company.

They claim the board has seriously mismanaged the disposal of valuable assets, having allegedly failed to first properly consult with shareholders or independent experts. Fulman, which recently made a bid for DHP entity Oviedo, believes developing land assets and selling the business as a going concern, or simply holding on to the business may deliver a better return for investors.

More serious allegations involving alleged conflicts of interest on the board have also surfaced. All of the claims are denied.

The quarrel has been brewing behind closed doors since 2018 when the board first put forward proposals to wind down DHP but the split went public last May when Fulman lodged shareholder oppression proceedings against the five board members of Oviedo, all of whom are also DHP directors. They are Brendan Hickey, Hugh Lynn, Brian Davy, Kyran McLaughlin and Martin Naughton.

David Shubotham and Paul Coulson of Luxembourg registered Fulman Holdings.

The “incendiary” mismanagement claims levelled at members of the board have been described as grotesque and baseless by their lawyers in court. “While frivolous accusations of oppression are easily made, my reputation has been hard-earned and, in a business career spanning five decades, I have never once had my professional integrity questioned in this way,” Naughton states in an affidavit.

A company letter circulated in May advised shareholders of the attendant media publicity that comes with airing such grievances in court.

It is not that in its 31 year tenure, Davy Hickey has never before hit the headlines. It featured in the findings of the Mahon Tribunal over planning matters in Dublin in the 1990s. But for the most part, the property group has worked like a well-oiled machine purring quietly in the background.

Now with the finish line in sight, underlying tensions are out in the open. The gloves are off with Fulman last month moving to injunct the sale of Mountview and the Northern Quarter. A High Court decision is due any day.

Given the phenomenal success of DHP over the years, the row is hardly a legacy its principals might have wished for.

In the first of a two-part series on the dispute, The Currency looks at the history of Davy Hickey and the genesis of the row that has brought it into the spotlight. The second part will look at the allegations at the heart of the shareholder spat and how they have, so far, played out in court.

A bold and ambitious plan

Davy Hickey was founded in 1990 as a joint property venture between developer Brendan Hickey and investors and clients from Davy stockbrokers. More than 30 years on, it remains defined by the early acquisition of a 500 acre land bank in Saggart, Co Dublin for a reported IR£6 million.

A tight group ran the partnership in the early days as it embarked on a mission to develop a state of the art business campus on the Citywest site, then a blank canvas in a disadvantaged part of Dublin. David Shubotham was the main player in the nascent property business alongside Hickey, a civil engineer formerly of the Rohan development group, with Kyran McLaughlin in a non-executive role. Former government press secretary and lobbyist Frank Dunlop took on public relations duties.

Hickey later described Dunlop as a “very competent, a very diligent, very powerful, well connected individual” who “we intimately trusted”. The PR consultant and fixer was rewarded with an equity stake in Citywest and remains a shareholder in Davy Hickey Properties along with his wife Sheila.

Following extensive lobbying, a successful rezoning motion, contravening the development plan for the area at the time, was passed by Dublin councillors in March 1991 giving Citywest the green light. Davy Hickey said the industrial park would create 3,000 jobs in the high unemployment areas of Tallaght and Clondalkin. Dunlop had flown 20 councillors to Bristol to visit a business park there because nothing quite like it existed in Ireland at the time. Representatives from across the political spectrum backed the proposal for one million square feet of office/industrial use and a science park on the west Dublin lands.

Around the same time Dunlop approached DHP about a separate venture, an option on 250 acres of land at the former Baldoyle racecourse in north Dublin, owned by developer John Byrne and in need of rezoning. Dunlop named the late Fianna Fail TD Liam Lawlor as being secretly involved in the deal.

But the project blew up in controversy, with the former lobbyist later alleging he corruptly paid councillors for votes to rezone the green belt, claims that were investigated by the Mahon Tribunal.

In its 2012 report, the planning inquiry found that Dunlop received a total of IR£62,500 from Shubotham, Hickey or entities associated with the two men. In June 1991, after the success of the motion on Citywest, the lobbyist was given a cheque for IR£20,000 to make political donations to councillors for the local elections. Hickey said this seemed both reasonable and unremarkable, adding that he had no idea how Dunlop was going to distribute the money as he had never made a political donation before. When asked at the tribunal whether he believed paying politicians for the local elections would assist him in future planning/zoning projects, Hickey replied that his thinking had not been Machiavellian.

There were further DHP related payments to Dunlop in 1992, including IR£10,000 slated for political donations ahead of the November 1992 general election. But the tribunal concluded other sums, like money said to have been paid to the lobbyist for his work on Citywest, had also been used by Dunlop to influence councillors.

Ultimately the Baldoyle rezoning project did not win the support of the local authority. Dunlop said the deal was “torpedoed” by the suggestion in the media that the consortium behind the project stood to make IR£10 million. An Irish Times article from April 21, 1993 noted chaotic scenes, disorder and confusion as the vote was adjourned after it appeared the Baldoyle scheme might be pushed through by councillors against the wishes of council officials. Dunlop, a director of the company Pennine that put forward the plan, was spotted having regular meetings outside the chamber with councillors who supported the rezoning.

Dunlop would later give evidence in the corruption trial of former councillors in 2013 that he had told “big lies” to the tribunal. He denied that he was trying to protect developers and said the rezoning of lands at Citywest and Baldoyle Racecourse for industrial purposes had been “clean” projects in that he had had not bribed anyone to bring them about.

While the tribunal took the view Davy Hickey had taken steps to distance itself from the unfavourable press surrounding the proposed rezoning of the Baldoyle greenbelt, the scheme was already dead in the water by late 1992 according to Shubotham. Hickey said he had never been convinced the proposed site was viable. It “looked too good to be true,” he told the planning inquiry. A feasibility study found that even if the land was rezoned there were too many planning obstacles including issues around the sewage capacity required for a few thousand houses, a hotel, a golf course, and a shopping centre not to mention industrial and commercial buildings. Attempts to secure bank funding had been unsuccessful.

By contrast, Citywest would prove to be the gift that kept on giving; a vast land bank to be sold and developed from scratch over 30 years, starting with a cutting edge business park. Today the campus is a who’s who of Irish and international brands with big name tenants like Pfizer, SAP, Unilever, Eir and Glanbia, and data centres controlled by Keppel, BT, and Equinix.

Citywest business park

A mixed assortment

From the get-go, Hickey wanted to do things differently. Delivering a fully serviced, fully landscaped, “exceptionally attractive environment” was the developer’s unique selling point. “The first thing we did was put 70,000 trees on the site. We built lakes, we built streams,” Hickey later said. Throughout the campus the emphasis was on water and natural stone. Landscape architect Martin J Hallinan was brought in to give a sense of “shelter and security, together with a strong Celtic identity”.

By the mid-nineties, Davy Hickey was flourishing and joining forces with institutional investors like Bank of Ireland Asset Managers, Irish Life and New Ireland Assurance to fund developments while luring in early high tech tenants like Xilinx, a US company which manufactured re-programmable computer chips.

Another hallmark of Davy Hickey was diversification. It flexed its muscles into retail, office and residential development building a shopping centre and housing scheme at Citywest Village modelled on affluent Dublin suburbs like Sandymount and Ranelagh, with further development at Fortunestown Lane in Tallaght.

In 1995, the Fine Gael led rainbow government decided a science and technology park would be located at Citywest. As the decade closed, Davy Hickey began working with the IDA to build the National Digital Park, a world class connectivity hub, with the first data centres in Ireland. It wasn’t always a smooth relationship as the developer claimed in a legal action in 2007 that the development authority was frustrating infrastructural elements of the project, including the €150 million extension of the Luas line from Tallaght to Saggart which opened in 2011.

In the heights of the property boom, the company had joined forces with the Railway Procurement Agency to part-fund and build the 4.2 kilometre Luas spur with additional backing from the late Citywest hotelier Jim Mansfield and Harcourt Developments.

Not all plans came to fruition. Talks from the late 1990s with the Football Association of Ireland about building the state-of-the-art Eircom Park stadium in Saggart, petered out over funding issues.

Over the years it acquired a commercial portfolio from Paris to Leeson Street in Dublin city centre worth hundreds of millions of euros. 

The lowest point

A major feature of Davy Hickey’s investment strategy was patience. Instead of paying regular dividends, the business concentrated on capital growth, implementing large liquidity events every seven to ten years for shareholders when assets were sold. One such event took place in 1997, another was in 2007/08.

The latter payout proved timely for investors. In March 2008, as the Celtic Tiger era drew to a close, Davy Hickey reported a huge rise in operating profits to €7.5m for the year ended June 2007. But the salad days were over. In the current court proceedings Hickey said the pay-out ensured the business and its shareholders avoided the worst effects of the property crash and were able to “survive and thrive” afterwards. “We were one of the few Irish property businesses to spot the warning signs of the property crash before it happened, and to act upon our conviction,” he said.

Around this time, in the depths of the recession, there was a reshuffling of the deck at Davy Hickey.

Martin Naughton, the billionaire founder of Glen Dimplex, a founding investor in DHP, was appointed to the board in 2009 and has served as a director ever since.

In 2010, Hickey bowed out as managing director after 20 years, replaced by incumbent Hugh Lynn. While his hold on the reins loosened, Hickey kept a hand in the strategic planning of the business and the master planning and design of buildings.

The following year it was Shubotham’s turn to step down. After 21 years, he resigned as a director in what Hickey has claimed was the group’s “lowest point” when there was a “genuine risk to the solvency of the business arising from the extraordinary and unprecedented nature of the property crash”. All the other directors, he added, chose to remain on in their positions notwithstanding the personal exposure that would have arisen for them had the company entered an insolvency process.

On June 30, 2011 the group showed net negative assets of €27 million.

If there were internal tensions then, they remained private.

With the economy in free fall, DHP engaged in loan write-downs and corporate restructurings, eliminating approximately €94 million of bank debt from the group balance sheet between 2011 and 2014.

The strategy worked. DHP kept its head above water. And bounced back in style.

Minutes of a DHP board meeting from February 28, 2018 show a thriving property business. On the table was a the proposed sale of a €30 million data centre fort to Keppel, a €1.8 million site deal with German supermarket giant Lidl and terms agreed with developer Bartra on a €6.5 million deal for commercial space.

Despite the success, the original investors, aged in their sixties and seventies, wanted out.

Calling time

According to Hickey, Shubotham approached him in 2016 stating that the shareholders were due another major liquidity event. He says he discussed this with Hugh Lynn and they agreed such a disposal would probably mean the end of the line for the business in its present form, for a number of reasons.

First, Davy Hickey had just begun a major house building scheme, the completion of which would leave the company with a land bank of 10 per cent of what it had been at its peak. With fewer assets, the overhanging cost of paying staff and keeping the business alive would become increasingly inefficient and expensive.

Secondly, Davy Hickey had been conceived as a seven year venture. Given the age profile of shareholders there was a limited appetite to reinvest and grow the business. The response to an earlier attempt to rally new equity in 2013/2014 to increase Davy Hickey’s land bank outside of Citywest had been far from overwhelming, delivering a “relatively modest” €13 million from shareholders and €7 million from group funds.

Government policy changes, limiting capital gains tax exemptions and raising stamp duty on non-residential properties, also loomed on the horizon.

“A number of members – including myself – felt that the time would be right to move on from the business over the coming years,” Hickey said.

It was the moment to cash in. Shareholders were notified at the 2017 AGM that the board intended to bring forward liquidity proposals.

In March 2018, the board circulated a strategic assessment of the business outlining plans to scale back operations and deliver a return to shareholders at the peak of the property market rather than reinvesting in the business and going another investment cycle.

The document stated that as Ireland was now five years into a recovery after a deep recession “our view on both the investment market and the office letting market is that both are nearing a mature phase of the economic cycle and while a downturn in these sectors does not look likely in the short term, prospects for significant further growth appear limited”.

The shareholder liquidity proposal (SLP) set out to increase DHP’s net asset value to €1,200-  1,400 per share and convert it into cash over a couple of years in a tax efficient way. To achieve maximum value, assets would be sold piecemeal and, where possible, they would be enhanced before going to market. In Citywest, certain planning permissions would be sought; for a data centre on Kingswood Road, for 175 houses at Citywest village, and for new office buildings at Lake Drive.

An alternative plan was also tabled to shareholders. Plan B was a hybrid strategy where in addition to a cash realisation, certain DHP investment properties would be hived off into a new company and retained for a definite term.

The document was put together with legal advice from Mccann Fitzgerald and tax advice from Deloitte. Looking back on the SLP, DHP managing director Hugh Lynn said it would have led to significant tax advantages for shareholders as those who were Irish tax residents would pay capital gains tax rather than income tax on realisation.

While not required under Manx law, the board decided as additional protection for shareholders, that a 75 per cent supermajority would be required to pass the liquidity proposals – but if the SLP did pass, all shareholders would have to participate.

As it played out, the motion was withdrawn when a significant minority blocked its passage. By shareholding, a simple majority of 56 per cent of the company backed it. It was not enough.

An “ill considered, unfair” proposal

While Shubotham allegedly told Hickey and Brian Davy that he had concerns about certain aspects of the SLP but would not oppose it, in fact, he vigorously opposed it. As did Paul Coulson.

The dissent focused on provisions in the SLP, that delivered to Hickey, and Hickey alone, DHP property assets in lieu of a cash payout. Based on an open market valuation and subject to independent assessment, key investment properties and development sites in Citywest, Navan, and Bettystown – along with the Citywest freehold and a co-ownership stake in the Sugar Club venue and other DHP properties on Leeson Street – were earmarked for Hickey. Their value was to be commensurate with the developer and his wife Claire Hickey’s combined 26.7 per cent stake in the property group.

Shubotham complains that the board’s proposals were “ill considered, unfair” and “prejudicial” as they allegedly favoured one individual, Hickey, over other investors. He said without engaging independent advice and without prior consultation, shareholders were being offered a cash realisation only if they approved hand picked “prize assets” being assigned to the former MD who could then develop and presumably profit from them independently. “I have never seen such an unusual one sided proposal,” he said.

In court filings, Coulson alleges Brian Davy acknowledged at a meeting that there was an element of Hickey being “looked after” in his upcoming retirement. That claim is denied.

From the board’s perspective, the withdrawal of the SLP was an example of democracy in action. The proposal had failed to win the requisite support of members and had been put to bed.

But damage had been done. Mistrust soured future shareholder relations at Davy Hickey.

Along with smaller stakeholders like Pearse Trust Nominees and Ardagh’s Brendan Dowling, Shubotham and Coulson united as Fulman Holdings in April 2018, representing the biggest single shareholder in Davy Hickey and a formidable opposition group at loggerheads with the board.

Paul Coulson

Delivering on divestment

While the SLP was dropped by the board in April 2018, the plan to divest assets was full steam ahead. The overarching objective remained the same, break up Davy Hickey and maximise the value of the portfolio for shareholders as efficiently and quickly as possible. Correspondence from chairman Brian Davy in April 2018 noted the feedback from shareholders and reaffirmed the commitment to “achieve a substantial tax efficient liquidity event for shareholders within the next 24/36 months”. The board, he said, was resolute in its aim of achieving a liquidity event that “best meets the interests and needs of the company and all of its shareholders”. The letter noted that Lynn’s remuneration as managing director provided incentives for him to maximise shareholder value.

Fulman appeared to be on the same page. It wrote to members saying it was “important to bring forward alternative proposals which would provide immediate liquidity to shareholders and would ensure that value in DHP was realised in an efficient and timely manner so that the net proceeds could be distributed to shareholders”.

The board has delivered on divestment. Since March 2017, around €200 million worth of DHP assets have been sold on a piecemeal basis. Hickey says this has been done by way of a robust sales process using reputable and experienced property agents to achieve the best prices.

The breakdown is as follows: in the 12 months to June 30, 2018 assets worth around €46 million were sold. In the following year DHP took in sales proceeds of €104 million. The year to June 2020 had sales of €21 million. In 2021, assets with a value of around €26 million have been sold. The target date for completion is early 2022.

But in recent months, Fulman has continuously raised doubts about the efficacy of the strategy, alleging it lacks transparency and has not been the subject of proper independent analysis. It has argued that shareholder value could be maximised through an alternative approach of developing out assets and selling DHP as a going concern.

In the wake of the failed SLP, Fulman has made several bids for the shares and/or assets of the business, including an offer of €1,900 per share to buy out Hickey who refused to bite.

In 2018, shareholders were strongly advised by the board to rebuff Fulman’s push for a majority stake in DHP. The offer was conditional on the minority stakeholder acquiring over 50 per cent of shares in the company. Despite that assurance, the board warned smaller shareholders in correspondence that they could find themselves tied up in a Luxembourg company that holds no more than a minority stake in DHP. “The board sees no merit in shareholders swapping their shares in DHP for shares in the Fulman vehicle and considers their offer undervalues the future prospects of DHP,” stakeholders were advised.

Last October, the minority block made another move. Fulman called an EGM proposing resolutions to address its concerns about Davy Hickey’s failure to distribute cash balances to members; the absence of information and the requirement for an independent valuation to be conducted on a capital markets value basis; and the risk that company assets could be sold to a DHP shareholder in a new holding company.

Shubotham argued that a single DHP share could be worth €3,500 in a few years time if all its land banks were developed out rather than sold to third parties. Fulman’s resolutions faced opposition from the board and were shot down by the majority of shareholders. Lynn allegedly stated it was time to sell the assets because each of the management team wished to move on.

Instead, members favoured a resolution of the board at the company’s AGM on December 7, 2020, that proposed to transfer the remaining business and non-cash assets from DHP Isle of Man to a new Irish registered vehicle, Oviedo, for realisation over a period of 12 to 15 months. Cash assets were to be retained in DHP for distribution. The shareholder and board composition of Oviedo was to mirror that of DHP. Fulman unsuccessfully voted against the proposal.

The assets were subsequently transferred to Oviedo at an estimated value of €39.7 million or €310 per share. Included in the portfolio was a share in the Sugar Club and three Leeson Street properties, various commercial buildings and development sites around Citywest, the Citywest freehold and a 35 per cent share in lands at Bettystown and Navan.

Fulman’s buy-out offer

After last December’s AGM, Fulman once again advanced, this time with a pitch to buy Oviedo for not less than €620 per share, valuing the company at €80 million. This was double the board’s valuation. Shubotham and Coulson argued that Oviedo’s directors had tagged the assets at far too low a price that would result in a significant loss of value for shareholders.

The board of Oviedo said it would consider the offer. But soon relations broke down again in a row over due diligence. Fulman claimed obstruction when the company refused to release details of Oviedo’s 30 subsidiaries on grounds of confidentiality, and that most of the offshoot companies fell “outside the scope of due diligence”.

Oviedo accused Fulman of engaging in a fishing expedition to procure information on subsidiaries that were not for sale.

Fulman claimed it was being “sabotaged” in its efforts to find out the real value of the business it was bidding for. To what end? Allegedly so Hickey could retain a monopoly on key information that would facilitate him, and perhaps others, in ultimately acquiring the company’s assets at an undervalue. The minority shareholder pointed to Hickey and McLaughlin’s interest in a separate property development company called Brightwalk as a potential conflict of interest.

In reply, members of the board noted that millions of euros worth of DHP assets have been sold on the open market since 2017, none of which were acquired by Hickey or any of the company’s directors. “I have already averred that neither I, nor any person connected to me, proposes to purchase any of the company’s assets,” Hickey swore in a recent affidavit.

Legal letters flew back and forth. Offers of mediation ultimately went unheeded as terms could not be agreed between the warring parties.

The credibility of Fulman’s €80 million bid was called into question by law firm McCann Fitzgerald, on behalf of Oviedo, claiming there was “simply no commercial logic that might underpin an offer at the level suggested”.

Hickey, too, has claimed the offer was unrealistic as the net asset value given by the company of just under €40 million was based on accurate professional valuations. The financial backers of Fulman’s “inflated” offer were never made clear, he said. In respect of the due diligence dispute, he said it was a matter for the company to decide how any sale should proceed. “No professional third-party property company would seek to proceed by way of the purchase of the company and its 30 subsidiaries, as the risk and complexity involved in any such purchase would be too great,” Hickey states.

However following its bid, Fulman’s hackles were raised again last January when Oviedo decided to hive off the Leeson Street assets for development on the basis that they held potential future worth for shareholders. This appeared to be a u-turn from the position adopted at the AGM in December 2020, when the buildings were to be sold. Shubotham alleges DHP chair Brian Davy said in 2018 that he had got the Leeson Street properties checked and they were of little value. This was at a time when said assets were earmarked for Hickey in the SLP. Fulman argued that its criticism of the board’s disposal strategy had been vindicated.

In May, Fulman launched shareholder oppression proceedings under Section 212 of the Companies Act against Oviedo’s five-man board. Its essential complaint is that the directors are disregarding shareholders’ interests by winding down the company and selling off its assets piecemeal without taking appropriate independent advice on what the value of the business might be if sold as a going concern or if the various land assets were developed out.

Fulman claims appropriate reports and valuations should be obtained and openly distributed to shareholders so that they can make an informed decision about how to achieve the maximum return for the company and its members.

It also alleges that director Brendan Hickey has a monopoly on information about the Davy Hickey companies and their assets and that the board has failed to stop conflicts of interest from arising. 

The claims are denied by the respondents who argue the proceedings are fundamentally misconceived.  

The suit is also against shareholder interests linked to the board: Davycrest Nominees, Lusaro Management Ltd, Neil Naughton, Fiona Naughton and Claire Hickey. No wrongdoing is alleged against them. Oviedo is a notice party.

With the dispute centring on €40 million worth of assets in Oviedo (more according to Fulman), the case was transferred to the Commercial division of the High Court by Justice David Barniville.

At the initial hearing on May 17, the fact of development land at Mountview in Citywest being on the market was flagged by Fulman’s lawyers as bringing a degree of urgency to the case. Commercial real estate agents Cushman & Wakefield pitched Mountview to investors as a ready-to-go greenfield site, with planning permission for 110 homes and scope for further residential development.

But Fulman would wait another fortnight, until after a valuable plot of Citywest land known as the Northern Quarter was advertised in The Irish Times on May 26 at a guide price of €12 million, before moving to injunct the sale of both development plots.

The minority shareholder claimed to have been taken by surprise by the move to sell the Northern Quarter, citing the expert opinion of Roger Keogh, a chartered surveyor with Avison Young, that it is unusual to market two commercial developments in the same location at the same time as “it is likely to have the effect of damaging the prospects for optimising the value of both sales”.

Keogh also deemed “very unusual” the alleged confidential and off-market sale of a valuable Davy Hickey site in Navan, with closing bids to have been furnished by 28 April 2021. 

However documents produced at the injunction hearing last week revealed Davy Hickey was in fact acting in line with advice from John Moran, the chief executive of real estate company Jones Lang Lasalle.

Davy Hickey and Oviedo shareholdings

Fulman Holdings has 42,888 shares representing approximately 33.7 per cent of the business. Within Fulman, Paul and Moya Coulson have 10,530 shares while David Shubotham vehicle Thibault Management Services has 21,264 shares.

Brendan Hickey holds 27,743 shares in DHP in his own name (21.8 per cent). He also holds shares with his wife Claire Hickey through Lusaro Management Ltd and the Guernsey registered Levanzo Investments. Collectively they hold a 26.7 per cent stake in DHP and its offshoot Oviedo.

Hugh Lynn and his wife hold 1984 shares, around 1.5 per cent of the shares in both companies.

Collectively the board of DHP/Oviedo hold 22.9 per cent of the companies on their own, and around 38 per cent when family members are included.

The swing vote of unaligned shareholders, not involved in the row, is 28 per cent.

More generally in his report last August, John Moran instructed Davy Hickey that due to the mixed nature of its property and development assets, he did not believe there would be an “appetite” for a bulk sale to a single buyer. In his appraisal, he advised DHP it would achieve maximum returns at Citywest by bundling classes of assets, securing tenancies and sequencing sales.

The report gives a snapshot of the market – although, for reasons of commercial sensitivity, JLL’s valuations have been redacted from the copies presented in court. Some of the findings are hardly surprising, particularly in the context of the pandemic. For example, the appraisal finds the current appetite for residential and industrial space outstrips demand for offices. “Overall demand for speculative office development sites within Citywest will be low from developers. Unlike the industrial land market, it will be unlikely an occupier will want to acquire a site and develop their own office. These sites will therefore be the most challenging to sell.”

The report also distinguishes between types of offices in the Citywest business campus with a glass fronted, three floor, 38,000 sq ft office block at Lake Drive likely to appeal to a very different class of investor than a more modest own-door office unit at Kingswood.

In more recent weeks, Moran was called upon again to advise on the immediate disposal of approximately five acres of lands at the Northern Quarter of Citywest Village, with planning permission for 98 housing and apartment units and another planning application for a further 17 houses to be lodged. A portion of the site has been designated as a future school with 3.3 acres zoned for further high density residential development.

There was an element of striking while the iron was hot in the JLL recommendations. “Demand for residential land with existing planning consents is currently strong, with a shortage of opportunities being actively sought by a wide variety of buyers ranging from the PLC housebuilders, private property companies and developers, to the investor community.”

By this stage, Oviedo had already put the Mountview residential site in Citywest on the market. If received wisdom suggests two competing sales might drive down prices, Moran’s expert view was that opportunities in the Dublin residential market were few enough that the Davy Hickey company could capitalise on frustrated underbidder demand from the Mountview sale.

After a two day hearing last week, Justice McDonald reserved judgment on the injunction application leaving Fulman without relief in the interim.

Bids for Mountview wrapped on June 3 with offers coming in above the guide price. While Oviedo promised it would not close the deal before June 30, that deadline has arrived without a decision on the injunction. It is free to contract.

Last Monday, Paul Gardiner, for Oviedo, advised the judge binding contracts were likely to be signed either on Friday or Monday next. Justice McDonald said he was still hoping to deliver his ruling this week.

But as matters stand, with Mountview likely to be taken off the table, the pool of assets in dispute might already have dropped by around €9 million. Time is ticking.

Tomorrow: The allegations at the heart of the shareholder spat and how they have, so far, played out in court.