Analysis: FBD trials come amid speculation about possible takeover action
The launch of an internal investigation into FBD's high-profile chief executive, Fiona Muldoon, has thrust the resurgent insurer into the headlines and will re-ignite speculation about possible takeover action.
Belgian bank, KBC, has long been viewed as a logical suitor and sources claim the lender maintains a watching brief on the company, which has staged a blistering recovery since 2015 when escalating losses forced FBD to swallow a €70m lifeline from the Canadian financial heavyweight, Fairfax Holdings.
KBC pledged its commitment to the Irish market last year, fuelling expectations the bank is plotting a return to FBD after jettisoning its residual holding in the insurer during the boom.
KBC was a founder shareholder in FBD and by the time it exited in 2005, its involvement was regarded as one of the most successful foreign investments ever in an Irish company.
Now however, the power dynamics in FBD rest with its largest shareholder, the Farmer Business Developments plc, which owns almost a fifth of the insurer and Fairfax, which will gain a 19.2c stake if it opts to convert its bond into equity later this year.
The farming sector's interest in FBD is further strengthened by the FBD Trust, a charitable entity linked to the agricultural sector, leaving the main players wielding close to 50pc of the register.
These entrenched positions makes a play for full control virtually impossible and seems to point the way to a balance being struck in the share register between Fairfax and the farmers.
The Canadian firm, founded by Prem Watsa, has a track record of snapping up small interests in insurance companies and then launching a full-blown takeover move.
However, it's unclear whether the group harbours similar ambitions for FBD, which has a market capitalisation of about €370m. Mr Watsa, who now employs ex-Bank of Ireland head, Richie Boucher as a consultant, stands to make a €40m return on its FBD investment.
The conversion option remains open until March 2019, giving Fairfax plenty of time to ride out any turmoil possibly arising from the current saga.
However, others question why the Canadian group would remain involved when the company's rising profits, which grew fourfold to €42.7m in 2017, could attract suitors.
The shares are also some 15pc off the highs of last year although analysts predict the stock is likely to rally if the Central Bank of Ireland is to loosen its capital requirements.
FBD ranks in the top four of all the main insurance sectors, including personal injury, motor and household and property protection, making it an attractive target for consolidation.
Yet any approach must be made in partnership with the farmer stakeholders and while Fairfax has vowed to work with the majority owners, the shape of any grand bargain remains unclear.