Friday 17 January 2020

Samantha McCaughren: AIB sell-off a reminder of fire sale that cost billions

Finance Minister Michael Noonan
Finance Minister Michael Noonan
Samantha McCaughren

Samantha McCaughren

Exciting times over at AIB where the bank is pushing on with its long-awaited return to private ownership, overseen by outgoing Finance Minister Michael Noonan.

But they could have been even more exciting if the bank had hung onto assets it sold in a pre-nationalisation fire sale.

Fiona Heffernan, head of mail media products at An Post
Fiona Heffernan, head of mail media products at An Post

Most observers reckon the Government will look to raise €3bn in selling off about a quarter of its stake in the lender. That implies a valuation far short of the €21bn that the taxpayer pumped in, but the State also has the right to subscribe for new shares worth as much as 10pc of the bank at a later date at twice the IPO price.

That would mean that if the bank more than doubles its share price post-IPO, the State can reap some extra reward.

But a steady nerve back in the dark days - and deeper pockets - could have meant better returns now.

AIB used to own a 70pc stake in Polish lender Bank Zachodni WBK which it flogged for €2.9bn in 2010. That stake would today be worth around €5.75bn.

It also used to own a 22.4pc stake in US lender M&T Bank, which it sold in November 2010 for around €2.4bn at today's exchange rates. That stake would today be worth around €5.15bn.

Now hindsight is 20-20 and all that, but if the State had had some extra cash at the time (it didn't) and pumped that money into AIB, it would today be sitting on billions of euro paper profit.

What might have been, eh?

Thompson tunes out of Virgin for new Irish project

There’s change afoot at Wireless Group, the radio business which owns several Irish stations and was bought last year by Rupert Murdoch’s News UK and Ireland.

A new programming director has been brought on board, Francis Currie, who said he was looking forward to “working with the top class talent across a group of such diverse brands — from Virgin Radio in the UK, to local stations such as Signal 1 in England, The Wave in south Wales, U105 in Northern Ireland, and FM 104, Q102 and 96FM in the Republic of Ireland.”

No mention of LMFM in Louth and Live 95 in Limerick.

It was also announced that Virgin Radio’s programme director Liam Thompson will return home to Ireland for a new project. There is speculation that it is a new project for Wireless, but so far Thompson has revealed little to friends, joking only that “more news will follow”.

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An Post boss David McRedmond has been having a hard time of it of late, with plenty of outrage at his plan to close scores of post offices.

 But it was all pats on the back for An Post at the World Post and Parcel Awards in Paris last Wednesday, where it was up against the likes of internet giant Amazon and courier firm DHL. An Post won two of the nine awards, taking the top prizes for both e-commerce and Innovation for its promising marketing product The direct mail software pinpoints groups of desired customers for advertisers and also allows them to personalise marketing material.

It won in the face of competition from short-listed offerings from the likes of Deutsche Post and Swiss Mail. Fiona Heffernan, head of mail media products, was there to receive the awards and told me Admailer continues to catch the interest of international postal companies seeking to license the product.

Good to see An Post has some strong growth options in the pipeline, but it should not get used to praise just yet.

Sky’s the limit for 3D4Medical as value soars amid TV deal

Ireland’s hottest medical tech company, 3D4Medical, has just done a deal with Sky television, which will use its Complete Anatomy 3D platform when getting into the nitty gritty about sports injuries and the like.

Valuations for the firm are on the rise. Founded by John Moore, 3D4Medical, launched its new product offering, Complete Ortho, in May and I hear it had 50,000 users within the first week of launch.

The company expects to almost double revenue this year increasing sales from $5.2m to up to $10m. It initially got a boost from Apple which used its technology when launching the iPad Pro in 2015.

But the sales growth is mainly due to medical schools around the world adopting the firm’s 3D technology for teaching. Their lecture-building software, released six months ago, is already used in 125 universities around the world.

Being embraced by the medical community, and indeed Apple, is a lucrative business.

I understand that 3D4Medical was recently valued at €70m in an offer from one of the big book publishers, although the offer was turned down.

But no doubt more eager buyers with cheque books will come the way of Moore and his team.

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