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Interest in IFG's foreign arm sparks shares surge

Shares in financial services group IFG tempered a morning surge yesterday after the company confirmed it has received an unsolicited approach from an unnamed suitor interested in buying its international arm.

An early 20pc jump in the shares soon after the market opened was later pared, and the stock traded lower to close the day 10.4pc higher.

IFG's international business includes operations that establish and administer trusts, companies and foundations.

The division accounted for about 35pc, or £4.2m (€5m), of IFG's operating profits in the first half of 2011 with revenues of £16.6m (€19.8m). It hasn't yet released full-year results for 2011. In the 2010 financial year, the international arm delivered operating profits of €11m, or 45pc of the total. That was on revenue of €38.8m.

The sector has operations in offshore jurisdictions such as Jersey, Cyprus and the Isle of Man, as well as a presence in Switzerland and Ireland. Its business is largely focused on the administrative management of investment vehicles owned by high net worth individuals. The Cyprus office is largely dependent on generating business from Russia and Eastern Europe. IFG noted in its last annual report that despite the difficulties in global markets, its international business had performed well and that it saw "significant growth potential" for the division over the next four to five years.

IFG, which is headed by chief executive Mark Bourke, said that the approach for the business was "recent, at an initial stage and is subject to significant conditionality and caveats. As such it may or may not advance and no assurance can be given that a formal offer will emerge."

Last year, IFG and UK-based Bregal Capital agreed to terminate takeover talks that could have seen IFG valued at as much as €231m. Shares in IFG closed yesterday in Dublin at €1.38.

Irish Independent