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Goodbody pulls plug on €150m sale to Chinese consortium

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In a joint statement Goodbody and its majority owner Fexco said they had called off the sale. Stock image

In a joint statement Goodbody and its majority owner Fexco said they had called off the sale. Stock image

In a joint statement Goodbody and its majority owner Fexco said they had called off the sale. Stock image

The long-planned sale of Goodbody Stockbrokers to a Chinese consortium has been abandoned, with the firm blaming a late move by the buyer to change the terms of the deal.

In a joint statement Goodbody and its majority owner Fexco said they had called off the sale - understood to be for €150m - following a move by the buyer to alter its proposed post-sale shareholder structure.

In an internal memo sent to Goodbody staff and seen by the Irish Independent, Goodbody management led by managing director Roy Barret said the new proposal did not reflect "what we agreed originally" with the buyer.

"Stepping away is the right thing to do for our business, for our staff and ultimately for our clients," Mr Barret said.

Ireland's oldest and second-largest stockbroker said it will continue to trade as normal, bolstered by a windfall last year of more than €40m from its share of the sale of the Irish Stock Exchange.

That won't stop speculation that an alternative buyer could now emerge, potentially including Goodbody's former owner AIB.

The bank failed to buy Goodbody rival Investec Ireland last year and is in the process of appointing former Goodbody chief economist Colin Hunt as its own CEO.

In an official statement to media Goodbody said it and 51pc owner Fexco had jointly taken the decision not to proceed with the proposed acquisition.

"Both companies have concluded that the rationale for the original transaction is no longer applicable due to a proposed change in the make-up of the shareholder structure made by the acquiring group," they said.

Last July, following months of negotiations, Goodbody announced the conclusion of the deal to sell itself to a group led by Zhong Ze Culture Investment Holdings.

The sale was initially tipped to close at the end of 2018, but was subject to regulatory approval by both the Irish Competition and Consumer Protection Agency and by the Central Bank of Ireland, which had been an extremely slow process, sources said.

Under the July deal the Chinese buyers were to take complete ownership of Goodbody from majority owner Fexco, and from Goodbody staff and management who own the balance of the business.

Goodbody's management would have shared about €60m in cash and earn-outs from the takeover, had it gone ahead.

Zhong Ze Group was backed in its bid by Pioneer Century, a privately owned Chinese investment company and by asset manager JIC Trust, owned by China's sovereign wealth fund CIC.

Irish Independent