Business Irish

Sunday 20 August 2017

IFG suitors to start due diligence within days

FINANCIAL SERVICES

John Mulligan

John Mulligan

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IFG chief executive Mark Bourke expects due diligence on the company's books by two potential bidders to begin within seven to 10 days.

Decisions by both suitors whether or not to make formal offers are expected within four to six weeks once that process starts, he added.

Speaking following IFG's annual general meeting in Dublin, Mr Bourke said he was unable, due to takeover rules, to discuss in detail the approaches that had been made to the firm to date.

IFG's market capitalisation is €227.4m and any offer will have to be at a considerable premium to the current share price if the board is to recommend it to shareholders.

"If there's an opportunity to benefit shareholders, then we'll go down this route," said IFG chairman Joe Moran.

"If we feel that it's not real and our advisers tell us, we won't be able to recommend it; and even if we do recommend it, it will be a matter for our shareholders to decide at the end of the day."

British private equity fund Bregal Capital made the first move on IFG in mid-April, indicating it was interested in acquiring the group, which provides pensions and investment advisory services and derives 60pc of its profits in Britain.

The approach by Bregal prompted a move by a private equity firm controlled by Edmund Truell, the principal behind IFG's single largest shareholder, Fiordland, to express an interest in acquiring IFG, effectively protecting its interests in the company.

Fiordland owns almost 20pc of IFG, having bought into the company via a rights issue in 2009.

That stake cost it about €25m. Among the other shareholders is the Philip Lynch-led investment firm One51.

Conditional

Mr Moran, who owns 4.3pc of the firm and who is heading the company subcommittee handling the takeover approaches, told shareholders yesterday that the indicative offer initially made in April was deemed insufficient by the board and, subsequently, an increased proposed conditional offer was made in May.

The consortium assembled by Mr Truell then made an expression of interest in IFG and tabled an indicative offer.

"I must stress that both approaches were and are highly conditional," said Mr Moran.

Existing IFG management would be kept on the event of an acquisition, he added.

"It's not a trade buy, so they'll need the management," Mr Moran said.

He also acknowledged that if an offer doesn't materialise, many shareholders would be extremely disappointed.

"If the offer is not sufficient, why should I as a shareholder take a bid that doesn't reflect the value and potential value of the business?" he added.

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