Wednesday 13 November 2019

Goodbody dividend 'likely' as expected Chinese bonanza falls through for staff

Goodbody called off an expected €150m deal after concerns that the backers of the Chinese consortium had changed, it is understood. Stock image
Goodbody called off an expected €150m deal after concerns that the backers of the Chinese consortium had changed, it is understood. Stock image

Fearghal O'Connor, Deputy Business Editor

Goodbody Stockbrokers may consider a dividend programme as a way of retaining and motivating staff disappointed to have missed out on a long-expected major Chinese windfall.

More than 100 managers and key personnel hold a 49pc share of the Dublin corporate finance firm - with Fexco owning the remaining 51pc.

The shareholding staff in the 300-strong workforce were expecting to share as much as €60m from the proceeds of the sale to a Chinese consortium led by investment firm Zhongze Group.

But the Dublin stockbroking firm called off the expected €150m deal - in the making for two years - after concerns that the backers of the Chinese consortium had changed, it is understood.

Well-informed industry observers said there was now an expectation that the board of the country's second-biggest corporate finance house would closely examine the possibility of a liquidity event for shareholders who had been disappointed in their expectation of a windfall from a sale process that was announced last August.

"There is a lot of cash on the balance sheet and you have shareholders who have not been able to crystalise value," said a well-informed industry observer.

The potential for a dividend was "an obvious question anybody who thought they were getting a windfall will now ask of their managers", they said.

"Will competitors see this as an opportunity to try and raid people out of Goodbody? And if they do how will Goodbody react to that? Staff retention and motivation is an important factor that the board of Goodbody has to consider and it is likely that this will trigger actions over the coming weeks."

The business has built up reserves of over €90m, including the €45m proceeds of its share of the sale of the Irish Stock Exchange as well as retained earnings of €46m, according to latest posted accounts for 2017.

Sunday Indo Business

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