Monday 18 December 2017

Individuals will be able to buy shares in AIB when Government sells 25pc stake

Finance Minister Michael Noonan updated the Cabinet on the planned sale Stock image
Finance Minister Michael Noonan updated the Cabinet on the planned sale Stock image

Donal O’Donovan

Ordinary investors will be able to buy shares in AIB on the same terms as large financial investors when the Government sells a 25pc stake in the bank later this year.

Finance Minister Michael Noonan updated the Cabinet on the planned sale at a meeting on Tuesday.

The minister said that the key objective of an initial public offering (IPO) would be to maximise the return for the taxpayer on its investment in AIB.

The proposed sale of State owned shares is not a true IPO, which would raise funds for the bank itself and be run by its directors.

Finance Minister Michael Noonan
Finance Minister Michael Noonan

Instead it’s a structured sale on the Dublin and London Stock Exchange of part of the Government stake in the bank. 

The minister told cabinet that his officials, together with Rothschild and the other banks managing the share sale are examining options that will give individuals the opportunity to participate in an IPO at the same price as institutional investors.

It is likely that interested retail investors would be able to apply for shares through designated intermediaries or brokers, similar to what happened in the Aer Lingus IPO in 2006.

A minimum investment threshold will be considered, and small investors won’t be offered incentives to buy the shares.

The minister said that the Department of Finance has made substantial progress with preparations for a potential transaction.

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