Shareholders vote to spin off FBD's leisure unit
SHAREHOLDERS in FBD yesterday voted unanimously in favour of a deal to spin off the plc's volatile property and leisure division into a joint venture with the group's largest shareholder.
In a brief statement, FBD confirmed the result and said the transaction could now be completed "without delay". Sources last night suggested the deal could be executed by the end of the week.
The news follows the August announcement that the Farmers Development Group and FBD plc had reached an agreement to set up a joint venture.
Under the deal, the Farmers Development Group changes its €60m loan to the property and leisure division to €60m in loan notes to the new joint venture, plus a 50pc ownership stake in the new entity.
FBD will initially own the other 50pc of the joint venture and will have €63m on loan to the joint venture, the conversion of an existing €63m inter- company loan to property and leisure.
The structure of the deal means FBD could end up owning as little as 25pc of the joint venture at some point after 2016, when the loans can be converted into equity.
The news was seen as a positive by the market.
Between 2008, 2009 and 2010, the property division notched up close to €200m of write offs; FBD says the new deal will "reduce ... exposure to fluctuations in property valuations".
Yesterday shares opened at €6.45 and rose as high as €6.70.