Minister's position likely to delay naming preferred bidder for EBS
Published 12/02/2011 | 05:00
A PREFERRED bidder for EBS is "extremely unlikely" to be announced before the next government has taken power since the Finance Minister would have to approve any such deal, sources confirmed yesterday.
Brian Lenihan's admission that he does not have a "mandate" to make contentious decisions also throws the sale of Quinn Insurance Limited (QIL) into doubt as Anglo Irish Bank needs the minister to approve its bid.
Mr Lenihan made the comments about his lack of a "mandate" earlier this week when he announced he would not go ahead with a planned €7bn injection into the banks at the end of February. It is understood the minister's position also means he is unlikely to make a decision on the sale of EBS, which is down to a two-horse race between the Cardinal consortium and Irish Life & Permanent.
The State owns EBS through a special investment share and therefore has the casting vote in terms of the sale.
"What happens to EBS is a complex decision," said one source. "It's not just a question of who's bid is highest; there's a lot of combinations going on."
Cardinal's bid would see EBS become the foundation for a new Irish banking entity with funding from US backers Wilbur Ross and the Carlyle Group. IL&P's bid would see EBS being merged with Permanent TSB.
Sources said that since the decision was "strategic" and related to bank restructuring, it would probably be for the next Finance Minister to decide.
The National Treasury Management Agency, which is running the sales process, declined to comment.
The sale of QIL, meanwhile, was believed to be within a week of completion, but some now doubt whether Anglo will be able to get permission for its bid given the political situation.
Anglo, along with US insurance giant Liberty Mutual, are proposing to put about €600m into QIL to bring it back up to regulatory reserving levels.
Anglo hopes to use the cash thrown off by QIL to pay off a €2.8bn debt owed by QIL founder Sean Quinn and his family. QIL's new owner will be selected by the insurer's administrator, but the Department of Finance, as Anglo's owner, must okay the bank's bid.