Business Irish

Friday 2 December 2016

Business Confidential: Sharpe recruit could mastermind Bank of Ireland buy-outs across the water

Published 08/05/2016 | 02:30

Donald Trump and Michael Noonan at Doonbeg Photo: Niall Carson/PA Wire
Donald Trump and Michael Noonan at Doonbeg Photo: Niall Carson/PA Wire

Richie Boucher has made an interesting and potentially highly significant choice in picking Robert Sharpe to be his chairman at Bank of Ireland’s UK business.

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Following the Bank of Ireland results in March, Boucher said the bank would consider buying rivals as part of the consolidation of the British market.

The UK business had turned from a “strategic conundrum” to an “opportunity”, he mused.

“Clearly what we see in the UK is the dynamic of the challenger banks,” Boucher said at the time.

“Could we participate or be something in that challenger bank space? There is going to be a consolidation among challengers, as always.”

Hiring Sharpe, who joined challenger bank Aldermore as a director less than a year ago, lays down a marker.

There’s a smell of M&A in the air. Sharpe was an acquisition junkie during his time at Portman Building Society, swooping on a number of his smaller rivals including Staffordshire Building Society, Sun Bank and Lambeth Building Society.

In fact, he super-sized the Portman from the 13th-biggest building society into the third-biggest in the UK in just seven years.

He then merged Portman into the vast Nationwide Building Society, walking away with a €2.2m golden handshake when the dust settled.

Boucher has picked up a banker with a highly significant knowledge of the UK banking sector — particularly in the mortgage and building society space. What price Bank of Ireland to start splashing the cash?

Davy may double its money on biggest IFSC office block but CIE missed out badly

Dublin’s biggest office block — the PwC headquarters in the IFSC — must be cursed.

The building, which was developed by Johnny Ronan and Richard Barrett’s Treasury Holdings during the boom, has proved hard to shift.

Treasury receivers EY put the building on the block two years ago. Brian Moran’s Hines looked to have sealed a deal for the One Spencer Dock building in a joint venture with some German pension funds.

But that agreement has developed chronic hiccups.

One group that must be watching with disbelief is the semi-state transport group CIE.

Back in 2012, CIE was thrashing wildly in a messy financial crisis. The semi-state had racked up gobsmackingly heavy losses and needed a €36m bailout. Cue a fire sale.

CIE effectively owned 17.5pc of the office block as part of a complex freehold land arrangement deal at Spencer Dock. It sold the stake to Davy Stockbrokers in December 2012 for about €22.5m.

Based on the current price tag of €242m for the building, that stake could have doubled in value in just over three years. Epic result for Davy — less so for the taxpayer-owned CIE.

Siteserv seller Hobbs gets plum investment and finance role at Enterprise Ireland

Veteran dealmaker and venture capitalist Walter Hobbs has just joined up with Enterprise Ireland as its executive director of investment and finance.

The financier cut his teeth at KPMG, as did Enterprise Ireland chairman Terence O’Rourke, who became managing partner for much of the boom.

Hobbs was one of the founder directors of ACT, one of the most active venture-capital players on the market. He sat on the boards of a variety of companies, ranging from TV3 and the ill-fated Channel 6 TV station to telecoms revenue settlement firm AmBeo and vision tech company Ash Technologies.

More recently, Hobbs was the man charged by IBRC with selling Siteserv. He told RTE’s Prime Time that the Denis O’Brien offer for the company was accepted because it was the best, simplest and could be completed.

Handing out big dollops of taxpayer funds to start-ups and export-focused businesses should be altogether less controversial.

Paddy sale could see Irish whiskey behemoth Jameson worth over €1.7bn

The proposed sale of the iconic (if rough as gravel) Paddy Irish Whiskey brand to billionaire Bill Goldring’s New Orleans booze giant Sazerac may be the spirit’s best opportunity to make a mark on the global market. But what kind of deal did seller Pernod Ricard cut?

With the exception of Jameson, all of the really big Irish whiskey outfits have changed hands in the last decade.

John Teeling’s Cooley was sold to Jim Beam for $95m in 2011. That worked out at €340 for each of the 250,000 nine-litre cases sold.

C&C offloaded its Tullamore Dew brand (along with a stack of positively vile liqueurs) to William Grant for €300m in 2012.

William Grant quickly sold on the liqueurs for €128m, so it’s reasonable to assume the Tullamore Dew bit was worth close to €170m. That was a modest-enough €286 for each of the 600,000 cases.

Bushmills was sold by Diageo to tequila maker Jose Cuervo in 2014 as part of a convoluted €324m swap deal involving a 50pc stake of tequila brand Don Julio.

But this pales in comparison to the deal Richard Burrows pulled off at Pernod Ricard when selling Bushmills for the first time to Diageo in 2005.

He netted a whopping €292m for the brand — or around €655 for each of the 450,000 nine-litre cases at the time.

Despite the rising demand for Irish whiskey globally, the chances of Paddy getting anywhere close to that valuation look slim. But it does make Jameson — the 600lb gorilla in the Irish whiskey market with sales of 4.45m cases — look seriously valuable.

Even at the Cooley valuation, Jameson could be worth €1.7bn now. Cheap at the price.

Trump is making more from his Doonbeg golf course than from Miss Universe

US presidential candidate Donald Trump seems to be making one heck of a large amount of money from his Doonbeg golf course.

Trump bought the picturesque golf resort for a modest €8.7m in 2014. The resort had cost €28m to develop during the boom before the receivers were called in.

Trump’s personal financial disclosure report, filed with the US Office of Government Ethics last year, showed that the Trumpster picked up $10,755,683 (€9.43m) from “golf-related revenues” at his Trump International Golf Links — Doonbeg. The asset was valued at between $5m to $25m, according to the filing.

Irish golf, it seems, made more money than Trump’s Miss Universe entity, which only reported income of $3.4m for the year.

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