Business Irish

Sunday 18 February 2018

BoI investors want release from full bid obligation


Laura Noonan

BANK of Ireland (BoI) is preparing to hold another extraordinary general meeting to release its five new strategic investors from a stock market obligation to make a full bid for the plc, the Irish Independent has learned.

The news comes despite initial suggestions that the bank would not need to hold such an EGM, since the five shareholders taking a 35pc stake in the bank have insisted they will act independently rather than as a consortium.

This means they would not be covered by stock market rules that require any consortium owning more than 30pc of a plc to make a bid or reduce its stake, unless shareholders grant a dispensation.

Sources this week confirmed, however, that BoI's new shareholders had been deemed to be acting "in consort" when they approached the Government about the €1bn deal that saw them buy into the bank.

An EGM is being pencilled in for September 9, when the new shareholders will formally ask their fellow investors for permission to be allowed keep their collective 35pc stake without making a bid.

A spokeswoman for the Department of Finance confirmed that the State, which owns 15pc of the bank, will not be allowed to vote since it's considered a "connected party" because of its involvement in structuring the deal.

The motion is still expected to pass by a healthy majority, as the investment by the quintet allowed BoI to remain the only domestic financial institution outside state control.

The shareholders, led by Canadian insurance giant Fairfax Financial, are not expected to move to appoint directors to the board until after the EGM has been held.

Fairfax had previously said they expected one director to be appointed by the new investors, but some sources have suggested that two or three new board members could be co-opted.

The September BoI EGM marks the latest gathering of bank shareholders in a bumper summer that has already seen AGMs and EGMs from AIB, BoI and Irish Life & Permanent.

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