Bank of Ireland shares surge on takeover reports
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Friday November 21 2008
Bank of Ireland Plc, the country's biggest lender by assets, climbed in Dublin trading on reports that U.S. buyout firms are preparing to buy a stake in the bank.
Bank of Ireland rose as much as 18 percent and traded 16 cents higher at 1.17 euros at 8:44 a.m. local time, valuing the bank at €1.17 billion.
J.C. Flowers & Co. and the Carlyle Group want to buy a stake of as much as 40 percent in Bank of Ireland, the Irish Times reported, without saying where it got the information. The buyout firms want to merge Bank of Ireland with Irish Life & Permanent Plc, it added. Ireland's banks are facing rising losses on property loans after the end of a decade-long construction boom.
The solution ''will incorporate consolidation in the sector,'' Eamonn Hughes, an analyst at Goodbody Stockbrokers, wrote in a note today. ''It would appear preferential that the system is tackled in one fell swoop rather than piecemeal.''
Irish Life fell as much as 7.8 percent and Allied Irish Banks Plc fell 2.2 percent.
Finance Minister Brian Lenihan this week said it was ''desirable'' the country's banks boost their capital ratios by finding private investors and not seek a government bail out. (Bloomberg)
- Ian Guider
