Anglo poised to make decision on Quinn bid
Bank will present takeover plan to regulator within weeks
Published 28/07/2010 | 05:00
ANGLO Irish Bank is within weeks of presenting the Financial Regulator with firm plans for its takeover of embattled Quinn Insurance, the Irish Independent has learned.
The plan will reveal whether Anglo will make a play for Quinn on its own or with a partner and will also detail Anglo's exit strategy as well as its proposed management line-up.
The state-owned bank, which is owed €2.4bn by the wider Quinn Group, has been mulling over its options to recover the massive debt since the Cavan insurer went into administration in late March.
Anglo has been exploring mounting a bid for Quinn Insurance on its own, or linking up with an established insurance player for a joint bid.
Talks on both options are ongoing and a decision on what approach to take is due to be taken imminently, allowing full and firm plans for the potential takeover to be drawn up.
Those plans will be submitted to the Financial Regulator by "mid to late-August", before being sent forward to the Department of Finance and the insurer's administrators.
The shape of those plans will also be influenced by Quinn Insurance's full-length sales prospectus which will be issued to a handful of potential buyers, including Anglo, later today.
Anglo is understood to be impressed with the resilience of Quinn Insurance's Irish book in recent months, but the prospectus will give the bank's actuarial advisers a more concrete view of the insurer's fundamentals and future earnings.
Mounting a solo bid is seen as the fastest way for Anglo to recover the debt, since any future profits of Quinn Insurance or the spoils from any future sale of the insurer would not have to be shared.
Taking in a partner, most likely US firm Liberty Global, would give Anglo the benefit of shared risk and could also help convince the regulator the plan has the expertise to run an insurance company.
If Anglo goes it alone, the plan submitted to the regulator is likely to include a roll call of established industry professionals willing to help run Quinn Insurance. If Anglo takes a partner, the plan is likely to include a provision for the other company to buy Anglo out after a prescribed period of time.
"The Financial Regulator will listen to any realistic proposals in relation to the sale of Quinn Insurance," a spokeswoman said, adding that any plan must address the insurance company's solvency deficit as well as "ownership, governance, management and controls".
The Department of Finance is understood to have no defined view on what path Anglo should follow. "It's about whatever makes the most commercial sense and gets the most money back for the bank," a source said.
Anglo's plan also hinges on the approval of bondholders, who have guarantees for hundreds of millions of euro over Quinn Insurance assets, as well as the European Commission.