Novel float for Irish firm

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RICHARD KEENAN, an Irish farm machinery firm that claims to help dairymen tailor their milk for specific uses such as cheese and butter, has launched a unique internal stock market out of fear of a conventional public flotation.

The company is petrified that its competitors - large industrial feed manufacturers - will try to take it over and close it down if it is floated on the Irish or London stock markets.

Instead, it is raising money from its managers, staff and customers and operating an internal matched-bargain market to provide investors with liquidity.

The company believes its fears are well grounded: it has become a thorn in the side of the big feed suppliers, having taken about 12 per cent of their market by offering farmers not only the equipment to mix their own feed, but nutritional and veterinary advice to ensure the best combination.

"We've had takeover approaches from feed companies, but I don't believe they'd be pushing to develop our concept," said Gerard Keenan, the firm's managing director.

Traditional feed companies sell compressed pellets, which carry some, but not complete, nutritional information.

Keenan figures its system cuts the cost of feed for cattle from about pounds 330 a year to pounds 270 by allowing farmers to use silage grown on their own land, although it requires an upfront expenditure of pounds 10,000 to pounds 24,000 for the equipment. But the main benefits come from improved milk output.

The system allows dairymen to control the amount of fat, protein and other ingredients in their cows' milk to make it more attractive for dairies. "In Germany, we've developed milk for easy-spread butter," said Mr Keenan. He added that it can help address a herd's veterinary problems, too.

Keenan's equipment sales have risen from 70 units in 1985 to an estimated 1,500 this year, taking about pounds 150m in annual sales away from traditional feed companies in the UK alone. It also sells into a dozen other countries.

The new share offering is expected to raise pounds 1m for expansion into new geographical markets, valuing the company at about pounds 4m.

"We're not out to get top dollar for the shares," said Mr Keenan, who started the business with his two brothers. "We want to have shareholders who feel the same way we do."

The company was advised by the Dublin office of accountancy firm Price Waterhouse when preparing its offer, but is not required to go to the expense of preparing a formal prospectus.