Saturday 16 December 2017

IFG opens talks with Bregal Capital over €231m takeover


John Mulligan

Irish financial services group IFG has entered into exclusive talks with UK-based Bregal Capital after the private equity house made a proposal to acquire the company for €231m.

IFG was initially courted by Bregal back in April, when it indicated it was interested in making a bid for the firm that provides pensions and investment advisory services and makes about 60pc of its profits in Britain.

That prompted a firm controlled by the principal behind IFG's single biggest shareholder -- Fiordland -- to also express an interest in making a bid in an attempt to protect its position.

The indicative offer from Bregal was deemed by the IFG board to have undervalued the business and a due diligence process involving both suitors began.

Yesterday IFG confirmed that it has entered into exclusive negotiations with Bregal, which has now proposed to offer €1.80 per IFG share. IFG said the offer represented a 35pc premium to the average closing price of its stock in the three months up to April 20.

The exclusivity period will expire on October 10.

"Any offer would be subject to approval by shareholders of IFG and regulatory authorities," IFG said in a statement yesterday.

The proposal is not binding on either party.

Dublin-based financier Paul Coulson -- who controls Ardagh Glass -- reportedly bought a 1.6pc stake in IFG this month for €3.3m in advance of an expected offer for the firm.

If the Bregal proposal is accepted by shareholders, he'd gain roughly €300,000 on his investment.

Releasing interim results yesterday, IFG said that revenue for the first six months of the year rose 14pc to £56.3m (€63.7m), while adjusted operating profit was 21.4pc higher at £11.9m (€13.4m).

In the UK, IFG's James Hay division was administering 38,987 Self-Invested Personal Pensions on behalf of clients at the end of June. That was down from 39,391 at the beginning of the year.

IFG's financial advisory business in the UK -- Saunderson House -- boosted its profits by 37pc for the period to £2m.

At its Irish operations, IFG reduced its losses for the first half to £150,000 from £1.04m a year earlier.

Speaking to the Irish Independent, IFG chief executive Mark Bourke said that the results delivered the visibility and predictability that the company's shareholders primarily seek.

He said that the Irish business had also managed to attract 21 new corporate clients at a time when many rivals would be happy to retain their existing base.

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