Monday 25 September 2017

IFG to refocus after share prices plunge

ACQUISITION

John Mulligan

John Mulligan

IFG chief executive Mark Bourke has said the company will "get back to doing what it was doing" after it agreed with private equity group Bregal Capital to end talks that might have seen the latter pay up to €230m for the Irish financial services group.

Shares in the company slumped 26.3pc to €1.20 in Dublin yesterday after IFG said the negotiations had ceased.

The pair agreed to end discussions on Monday due to what IFG said was the "current dislocation in markets". IFG confirmed in April that it had received an initial approach -- which turned out to be from Bregal -- but the indicative offer was deemed by the IFG board to be too low. A company controlled by IFG's single biggest shareholder -- Fiordland -- subsequently expressed an interest in making a possible bid.

Last month IFG, which provides pensions and investment advisory services, said it had entered into exclusive negotiations with Bregal Capital, which was proposing to offer €1.80 per IFG share. That exclusivity was due to end on October 10 and it was almost certain that the board would have endorsed the offer to its shareholders.

Among those set to make a killing from a takeover was Dublin financier Paul Coulson, who controls glass maker Ardagh. He bought 1.3pc of IFG at a cost of €3.3m in the hope of making an easy €300,000 if the deal went ahead.

Mr Bourke told the Irish Independent that the increased level of uncertainty in markets in recent days had prompted the talks with Bregal to finish.

As a business, Mr Bourke said IFG was "resilient, but not immune" from market turmoil, particularly in terms of the 30pc or so of its turnover that was generated from corporate and trust services. He added that tougher market conditions also served to "harden" debt costs.

Bregal had been clear on its intentions from the outset and wasn't prepared to get involved in any lengthy renegotiations, said Mr Bourke.

"It would have been absolutely wrong to get into that," he added, saying the fact the talks had been ended provided important resolution for the business.

IFG confirmed it was not currently involved in any talks regarding any potential offer.

Irish Independent

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