The planned €155m sale of Goodbody to the Bank of China has collapsed because of Covid-19 disruption, according to the stockbroker.
The second straight failure of an agreed Chinese takeover of the Dublin firm has left collective egg on the face for Goodbody and Fexco, the stockbroker's majority shareholder. They picked the bigger cash price offered by Bank of China over bidders with strong Irish ties.
Bank of China emerged in November as the surprise winner over rival bids from Davy Stockbrokers and Irish Life parent Great-West Lifeco. The deal received Central Bank of Ireland approval in March, seemingly clearing the way for an official summer handover.
"However, Bank of China has now informed Goodbody that, due to the unprecedented global impacts and uncertainty caused by Covid-19, it is not in a position to complete its proposed acquisition of Goodbody," the stockbroker said in a statement. "As a result, the proposed transaction has been terminated."
Many were surprised to see Goodbody and Fexco pursue a second Chinese offer after its €150m agreement in 2018 with Zhong Ze Culture Investments fell apart following months of delay and mounting doubt.
And some analysts yesterday questioned why Covid-19 disruption would stop this acquisition. They pointed out that S&P Global Market Intelligence rates Bank of China as the world's fourth-largest financial institution with €2.9 trillion in assets.
"Bank of China could buy Goodbody a thousand times over without breaking a sweat. It clearly has stopped wanting to," said one market analyst.
Goodbody managing director Roy Barrett and Fexco chief executive Denis McCarthy declined requests for comment via their spokespeople.
Mr Barrett told his staff last month in a video call that the Bank of China deal was taking longer than expected to close, a development reported by the 'Sunday Independent'.
During that call, he reportedly was asked whether the deal could fail and Davy might re-enter as a bidder.
Yesterday, after the deal's failure was confirmed, Mr Barrett emailed clients to stress that Bank of China and Goodbody still could "explore avenues for mutually beneficial collaboration and business development".
Goodbody employs more than 300 staff. It is Ireland's oldest stockbroking firm, tracing its roots to 1876.
The Co Kerry-based financial services provider Fexco paid €24m to AIB in 2011 to acquire a 75pc stake. Goodbody's own management and staff held the other 25pc and gradually built their stake to 49pc.
Had the Bank of China deal proceeded as planned, Goodbody employees would have gained half of their proceeds once the deal closed, the rest after three years.