Business Irish

Thursday 23 January 2020

Four EBS bidders engaged in due diligence

Thomas Molloy

FOUR bidders, one Irish and three foreign, are currently carrying out due diligence on the EBS which could lead to the eventual takeover of the building society founded 75 years ago to help teachers buy their homes.

The four are Irish Life & Permanent, US investment specialist J C Flowers, British private equity fund manager Doughty Hanson and Dublin-based Cardinal Asset Management together with Carlyle Group, a large US financial services investment company. Jersey-registered Cardinal Asset Management is led by Nick Corcoran and Nigel McDermott, two Dublin businessmen who have also invested in wind energy and hedge funds.

All four bidders have been sifting through the Government-owned building society's books, stored in a so-called data room, since the beginning of the month to prepare their bids.

Finance Minister Brian Lenihan said last week that he expected a decision on EBS to be made sometime next month. Mr Lenihan told an Oireachtas committee last month that a sale would be the best option if "expressions of interest were forthcoming and realistic".

While Irish Life is believed to be considering merging its Permanent TSB unit with EBS to create a so-called third force in Irish banking, the other three venture capital groups are likely to be eyeing some sort of joint venture with the Government.

All four companies are in talks with both EBS executives and the National Asset Management Agency (NAMA), which is keeping a watchful eye on the talks on behalf of the taxpayer who has pumped hundreds of millions of euro into the institution to shore up capital rations.

A source said the discussions have gone easily so far and were progressing well.

The Government injected €100m into EBS in May and a further €250m last month ahead of the transfer of a second batch of loans to NAMA this week.

The society suffered a 46.5pc discount on its second tranche of loans compared with a 37pc discount on the first tranche. The sale of EBS would allow the Government to claw back the capital that has been pumped in.

Irish Independent

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