Anglo takes first steps in bid for ailing insurer
Published 17/09/2010 | 05:00
ANGLO Irish Bank's plan to lodge an 'expression of interest' in Quinn Insurance ahead of tonight's deadline got board approval yesterday, but key aspects of any bid have yet to be finalised.
Merchant bank Macquarie has given potential buyers until 5.30pm today to lodge expressions of interest, which it will then evaluate on behalf of Quinn Insurance's administrators.
A prospectus sent to would-be buyers features "an unbelievable amount of non disclosure agreements", including not publicly disclosing any intention to bid, sources said last night.
It is understood, however, that several trade players including Aviva, RSA, FBD and US giant Liberty Global are likely to indicate their interest in proceeding to the next stage of the bidding process.
Sources also confirmed that a number of private equity groups have been running the rule over the Cavan insurer and may contact Macquarie before tonight's deadline.
Anglo Irish Bank, which is trying to protect its €2.8bn exposure to the wider Quinn Group, is developing a bid that would see the insurer remain part of the Quinn Group.
The plan would see Anglo stump up capital to bring the insurer back to minimum solvency levels, allowing it to continue trading and ultimately help the Quinn Group to service its Anglo debt.
The key unknown in Anglo's strategy is whether the bank will proceed on its own or submit a joint bit with a trade partner, most probably Liberty.
"It is keeping all its options open on that one," a source said last night. "It was discussed at the board meeting and a decision was taken to proceed with an expression of interest, but that's all."
Any Anglo Quinn bid would ultimately have to be approved by the Department of Finance in its role as the bank's sole shareholder.
"The expressions of interest are non-binding, so there's no need for government approval at this stage," a spokesman for the Department of Finance said last night.
Asked whether the department supported "the spirit" of Anglo's Quinn plans, he declined to comment. The department is understood to be holding off on forming a view on the plans until the bank has provided more detail.
If the bank's plan is successful, the investment in Quinn Insurance is likely to be held within the Asset Recovery Bank, which will be charged with winding down Anglo's loan book.
The bank is believed to have already taken a €1.7bn write-down on the loans advanced to the Quinn Group and the Quinn family.
The potential to reduce this write-down if the bank's takeover of the insurance company goes ahead is unclear.