EBS suitor has €3bn war chest for other Irish assets
Published 13/09/2010 | 05:00
A CONSORTIUM led by Cardinal Capital Group has ear-marked up to €3bn for "other Irish assets" should its bid for EBS be successful, the Irish Independent has learnt.
The news comes as the Government mulls over four bids for EBS, including one from the Cardinal-led group and one from Irish Life & Permanent (IL&P).
The Cardinal group is understood to be arguing that its bid for state-controlled EBS is best for the Irish financial landscape since the consortium plans significant investment and expansion.
As well as putting some €500m-€600m into EBS, the Cardinal consortium is believed to be ready to invest up to €3bn in other Irish financials including some parts of embattled Irish Nationwide.
"They're looking at everything that's going on in the Irish market at the moment," said one observer, pointing to the considerable financial firepower of the consortium.
As well as proprietary investment boutique Cardinal, the consortium includes private equity investor WL Ross & Co, which has €9.6bn under management and private equity giant The Carlyle Group, which has €91bn under management.
The consortium sees itself as a "long-term player" in the Irish market, but is only likely to invest in smaller Irish assets such as parts of Irish Nationwide once it has secured something "chunky" such as EBS.
Since the Cardinal grouping will be in expansion mode, it is understood to be arguing that its deal is the best for EBS's staff with no impact on job numbers. The consortium is also understood to have been stressing it is in a position to immediately execute the transaction, with funding lined up.
IL&P, on the other hand, would have to turn to the markets for about €925m to fund its plans to merge its banking arm Permanent TSB and EBS into a new banking force.
Sources close to IL&P last night stressed that there was "no question" of the bancassurer having any difficulties raising that money.
"The market has been well-prepared for this and they're expecting it," said one source.
IL&P has also made no secret of its plans for acquisitions beyond EBS, dazzling analysts and media with a list of six potential targets at a recent results presentation. The list included everything from life insurer New Ireland to AIB's asset management arm.
The acquisition would be largely funded on the international money markets. IL&P believes it has a good story to tell the markets following its recent half-year results and last week's stress test results.
The half-year results showed IL&P losses narrowed dramatically from €220m in the first six months of 2009 to just €32m in the same period this year.
The institution's stress tests results, meanwhile, showed IL&P would have to raise just €145m to meet the Financial Regulator's targets.