Business Irish

Friday 24 November 2017

Confidence boost for BoI as Capital ups its stake in lender to over 9pc

Donal O'Donovan

Donal O'Donovan

BANK of Ireland shareholder Capital Group has dramatically increased its stake in the bank, in what is a major vote of confidence in the Irish lender.

US-based Capital Group now owns 9.11pc of the bank's shares, up from just over 5pc in October last year.

Its takes its holding to almost the same level as those of directors Wilbur Ross and Prem Watsa who each hold a stake of just under 10pc in the bank.

Based on today's prices, Capital Group's stake is worth €455m. Shares in Bank of Ireland were down yesterday, at 16.6 cents each, after coming off a recent high.

Capital Group has been rapidly increasing its stake in recent months, a period when the bank's share price has also been rising sharply, though price rises may have been helped by the purchases.

Portfolio

Capital is one of the world's biggest investment firms. In Ireland, it owns stakes in CRH and Ryanair as well as Bank of Ireland.

Back in 2011 it was one of a group of five North American funds that teamed up to invested €1.1bn in Bank of Ireland, taking a combined stake of 35pc under a deal that kept the lender from effectively being nationalised.

Capital Group was one of the smaller investors in that the deal, which was dominate by US investor Wilbur Ross and Canada based Prem Watsa.

Mr Ross and Mr Watsa were both appointed as directors of Bank of Ireland last year.

Their stakes have been relatively static since the initial investment however, unlike Capital Group.

On October 30 last year the US group's stake briefly dropped below 5pc. However on February 1 this year that had increased to 6pc, a week later the stake was 7.04pc hitting 8.9pc on March 12 and 9.11pc a day later, according to documents filed to the Irish Stock Exchange.

Its likely many of the shares being bought by Capital Group are being acquired from US investor Harris Associates. It has cut its stake in the bank to less than 3pc, from over 7pc as recently as last October.

Harris is still the biggest private shareholder to have stuck with the bank since before it was bailed out, but appears to be cashing out much of its stake.

For a period in 2011, Harris was briefly the biggest single private-sector investor in Bank of Ireland. That was before the consortium led by Wilbur Ross and Prem Watsa took its stake in the lender.

Irish Independent

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