Saturday 20 January 2018

Kennedy Wilson offloads its stake in Bank of Ireland at a massive profit

Upmarket: The Alliance gas works apartment building in Dublin is owned by Kennedy Wilson
Upmarket: The Alliance gas works apartment building in Dublin is owned by Kennedy Wilson
Donal O'Donovan

Donal O'Donovan

US private equity giant Kennedy Wilson is understood to have quietly cashed in its stake in Bank of Ireland after playing a key role in the deal that saved the bank from nationalisation two years ago.

California-based Kennedy Wilson was one of five US and Canadian firms that made a combined €1.1bn investment in Bank of Ireland in the summer of 2011. The deal allowed the lender to be the only big Irish bank to ride out the financial crisis without being nationalised.

Data from financial information giant Bloomberg shows Kennedy Wilson is no longer listed among the 100 biggest shareholders in Bank of Ireland – a list that includes even tiny stakes of a fraction of one per cent.

Kennedy Wilson declined to comment on its current holding in the bank.

The US firm bought a 0.8pc stake in the bank as part of the 2011 rights issue, buying the shares at 10 cents each.

Over the past year in particular, Bank of Ireland shares have soared and now trade at two-and-a-half times the rescue price.

The shares closed at 26.6 cent each last night. It means Kennedy Wilson could have cashed out after more than doubling its money in little more than two years, a stunning return for a bank investment.

US billionaire Wilbur Ross and Canada's Prem Watsa were the biggest investors in the 2011 deal, but Kennedy Wilson's role is credited as being pivotal to the origin and success of the transaction.

That original Kennedy Wilson stake was below the 3pc threshold where an investor must publicly declare when it is buying and selling shares.

Public documents show the other four backers of the 2011 rights issue are all still big Bank of Ireland shareholders.

US-based Wilbur Ross now owns a 9.74pc stake in Bank of Ireland and has taken a seat on its board of directors.

Prema Watsa owns 9.32pc of the bank and also joined the board of directors.

A third investor, Capital Group, now has an 8.95pc shareholding, while Fidelity owns 7.99pc of the bank.

Between them those four investors collectively own 36pc of Bank of Ireland, more than the 35pc held by the five original investors when the 2011 deal closed.

Kennedy Wilson, meanwhile, has continued to invest in Ireland.

Its biggest acquisition to date was the 2011 acquisition of Bank of Ireland Real Estate Management, done just before it bought into Bank of Ireland itself.

This year alone it bought a slew of Ireland's best commercial property, partnering with Varde in a successful bid for the €306m "Opera" Castle Market Holdings portfolio of offices and shopping centres.

Kennedy Wilson also spent €80m buying apartment blocks at Clancy Barracks in Dublin this year. It owns the Alliance Building, a swish apartment block built in a former gas works in Dublin 4.

Sunday Independent

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