Tuesday 12 December 2017

Suitors lined up for EBS while IL&P considers merger option

Joe Brennan and Laura Noonan

A HANDFUL of parties, mainly foreign private equity firms, have signalled an interest in joining the auction of EBS Building Society ahead of a bids deadline in two weeks.

The society's management team has been giving a number of presentations over the past week to prospective buyers, according to sources familiar with the process. But it is still too early to separate 'tyre-kickers' from more interested bidders, they said.

"You will only really know how serious most of these guys are when it comes to showing the money," said one source. First bids are due on July 2.

EBS has been in talks for almost three months with a consortium led by financiers Nick Corcoran and Nigel McDermott of Cardinal Asset Management and backed by US buyout firm JC Flowers.

However, it signalled last week that it was opening up the process, initially luring Irish Life & Permanent into the ring.

IL&P has made no secret of its desire to push its loss-making banking arm Permanent TSB into an industry merger.


The Government injected a further €250m into EBS this week to buoy its capital reserves ahead of the transfer of a second batch of loans to NAMA. The society suffered a 37pc discount on its first NAMA tranche.

EBS received an initial €100m bailout last month and the State committed to providing a further €775m -- by way of promissory notes, or IOUs -- to shore up its capital base and help reach regulatory targets.

Finance Minister Brian Lenihan told an Oireachtas committee yesterday that a sale of the society would be the best option for the State, if "expressions of interest were forthcoming and realistic".

This would allow the Government to claw back the capital that has been pumped in.

It is believed, however, that IL&P is more likely to pitch a merger between Permanent TSB and EBS. This would see the State as the sole provider of capital to the EBS part of the deal, while IL&P would raise up to €900m of equity to prepare Permanent TSB for its end.

Irish Independent

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