Developer Gerry Gannon – remember he’s the one in the fedora who was last seen on TV with the missus stuffing the Brown Thomas bags into the back of a silver Range Rover – is reputedly one of NAMA’s Top 10 developers and his loans were acquired by the Agency in early 2010. One of his highest profile developments is the K Club in county Kildare, the world-class hotel and golf resort which also has significant residential property development – the history of the K Club is chronicled here together with details of residential development and the well-heeled buyers. Gerry is understood to have a 49% stake in the K Club with the remaining 51% owned by packaging tycoon Michael Smurfit. Gerry’s stake has been on the market since June 2010, with a price tag of €60m. In January 2011, it was reported that the owner of the remaining 51% stake, Michael Smurfit was interested in buying Gerry’s 49% stake through NAMA but “no figure has been put on the table and Dr Smurfit is waiting for a response from NAMA but they have yet to get back to him” Fast forward one year, and credible sources say that the sale of the stake has been agreed, that Michael Smurfit is indeed the buyer and wait for it, the price is understood to be just €10m.
NAMA and the K Club were asked for comment on the transaction, and none has been forthcoming. If confirmed, and remembering that Michael Smurfit would be classed as a “special purchaser” because he presumably has great interest in who his partner(s) will be and might therefore have been expected to pay a premium on top of the open market value of the stake, the price will certainly raise eyebrows, and the sale will attract questions about the 2010 valuation and what has caused the collapse in price since.
There is also another angle of concern if this transaction is confirmed. By any standard, Michael Smurfit has been a business associate of Gerry Gannon, they’ve been in business together in the K Club since 2005. NAMA faces legislative restrictions in its choice of buyer. Remember the brouhaha last summer when Enda Kenny gaffed in front of the British Irish parliamentary party meeting in Cork and suggested shenanigans in NAMA’s sales which prompted this reassurance from the NAMA chairman a couple of days later that “in the case of property which is being sold by a receiver acting for NAMA, a purchaser is asked to make a sworn declaration that he is an independent third party purchaser not connected in any way whatsoever with the vendor”
Michael Smurfit’s company Smurfit Kappa bought its leased offices in Clonskeagh last year in a €8m-transaction overseen by NAMA, so the man obviously has a relationship with the Agency but has NAMA broken its own rules by apparently agreeing the sale of the K Club stake? NAMA is not saying.
UPDATE: 23rd April, 2012. Press reporting claiming the sale of Gerry Gannon’s share in the club was concluded on Friday last 20th April, 2012.