Thursday 27 July 2017

CVC sought IL&P/BoSI tie-up before withdrawal from market

Joe Brennan

CVC Capital Partners, the global private equity powerhouse, had been looking to get involved in a tie-up between Bank of Scotland (Ireland) and Irish Life & Permanent, before negotiations ended between the lenders without agreement.

Sources told the Irish Independent that the investment firm had been running the rule over potentially investing in a combined entity -- although it had not entered talks with either institution.

It is not known if CVC still harbours an interest in investing in the Irish financial sector.

BoSI announced a dramatic retrenchment in the Irish market this week, after its hopes of participating in expected consolidation between the country's smaller lenders came to nothing. The UK-owned bank now plans to close its 44-branch Halifax network and intermediary business, with a loss of 750 of its 1,600 workforce.

Hatched

The bank had postponed announcing a similar plan at the last minute last summer, as it began investigating ways at muscling into a so-called 'third force' of Irish banking being hatched by the Government.

BoSI approached the Department of Finance last year about how it could take part in an industry-wide deal.

The Government told BoSI to seek out IL&P, which has been hoping to hive off its Permanent TSB into a 'third force', also comprising EBS and Irish Nationwide.

The two building societies have been in talks since November under the eye of the Department of Finance. The State is preparing to pump a combined €2.4bn into the duo, to buttress their balance sheets against discounts on loans bound for the National Asset Management Agency (NAMA).

Some sources suggested that CVC's main interest lay in getting its hands on IL&P's Irish Life business. The life assurance and pension unit is widely believed to be undervalued by the market, which remains concerned about the group's weak Permanent TSB arm.

CVC, BoSI and IL&P all declined to comment when contacted yesterday.

Irish Independent

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