Thursday 22 August 2019

Bank of Ireland shares plunge after Prem Watsa halves stake

Traders work on the floor of the New York Stock Exchange (NYSE)
Traders work on the floor of the New York Stock Exchange (NYSE)
Donal O'Donovan

Donal O'Donovan

Shares in Bank of Ireland plunged as much as 5pc yesterday, after a report that the bank's biggest private sector shareholder, a subsidiary of Fairfax Financial Holdings, is selling half of its remaining stake.

Hamblin Watsa, the subsidiary named after Fairfax's founder, Canadian billionaire Prem Watsa, will sell €415m of the bank's stock at 0.23 cent a share via a placement, Deutsche Bank said.

It cuts the stake from 2.9pc to around 1.5pc. Prem Watsa orginally held almost 9pc of the bank, having bought in at 10 cent a share in a 2011 deal as part of a consortium whose combined investment kept the bank from full nationalisation.

While Watsa has more than doubled his money in the latest sale, he previously sold shares at between 33 cent a share and 36 cent a share in 2014 and 2015.

US president elect Donald Trump's pick for Treasury Secretary Wilbur Ross bought into the bank alongside Prem Watsa and others in 2011 but has since sold all of his shares. Shares in Bank of Ireland closed down 2.669pc yesterday at 23.75 cent each, having been as much as 5pc lower.

Elsewhere, US stocks headed for a fresh round of records as health-care shares rose the most in a month, joining a post-election rally that's bolstered equities closely tied to economic expansion.

Oil powered above $51 a barrel on signs producers are following through with agreed production cuts.

The Stoxx Europe 600 Index climbed 1.1pc, poised for its best week since January. Drugmakers, media and real estate companies were the best performers. With the ECB refusing to allow more time for a rescue of Italy's Monte dei Paschi di Siena, Italy's FTSE MIB Index fell 1.2pc Italian bonds yields increased.

Additional reporting by Bloomberg

Irish Independent

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