State fixes exit from Bank of Ireland
Source: Bloomberg News |
July 26, 2011, Tuesday
|
Print Edition
Print Edition
IRELAND is to sell up to 37 percent of Bank of Ireland to an investor group for 1.12 billion euros (US$1.61 billion) just as a rights offering gave the government majority ownership of the lender.
Private investors will own at least 68 percent of the country's largest bank after the transaction closes tomorrow, Finance Minister Michael Noonan said yesterday. He did not identify the investors involved.
Bank of Ireland is seeking to raise 1.9 billion euros to bolster capital. The lender is offering investors shares at 10 cents each, compared with the 10.1 cents at which the stock traded at the end of last week.
The bank said earlier this month that the state may own between 29 percent and 70 percent, depending on how many private investors take advantage of the rights offering.
Analysts said foreign investment in Bank of Ireland is an important milestone for the Irish government, claiming it sends a positive signal to the market following turmoil in the banking sector. However, Eamonn Hughes, an analyst at Goodbody Stockbrokers, said: "We still value the bank closer to 8 to 8.5 cents."
Bank of Ireland stock rose about 9 percent in Dublin, trading at 11 cents early yesterday. Allied Irish Banks, the nation's second-largest lender, rose 4.8 percent.
Ireland was forced to seek an 85 billion euro international bailout in November following the near-collapse of the country's banks. The state already controls Anglo Irish Bank, Irish Nationwide Building Society and lender EBS. Irish Life & Permanent is also close to falling under the state's aegis.
Separately, Allied Irish, the country's second-largest lender, said its underlying loss widened to 2.6 billion euros in the first half from 2.1 billion euros at the same time a year earlier as bad debts climbed. The state already owns more than 90 percent of the lender.
Private investors will own at least 68 percent of the country's largest bank after the transaction closes tomorrow, Finance Minister Michael Noonan said yesterday. He did not identify the investors involved.
Bank of Ireland is seeking to raise 1.9 billion euros to bolster capital. The lender is offering investors shares at 10 cents each, compared with the 10.1 cents at which the stock traded at the end of last week.
The bank said earlier this month that the state may own between 29 percent and 70 percent, depending on how many private investors take advantage of the rights offering.
Analysts said foreign investment in Bank of Ireland is an important milestone for the Irish government, claiming it sends a positive signal to the market following turmoil in the banking sector. However, Eamonn Hughes, an analyst at Goodbody Stockbrokers, said: "We still value the bank closer to 8 to 8.5 cents."
Bank of Ireland stock rose about 9 percent in Dublin, trading at 11 cents early yesterday. Allied Irish Banks, the nation's second-largest lender, rose 4.8 percent.
Ireland was forced to seek an 85 billion euro international bailout in November following the near-collapse of the country's banks. The state already controls Anglo Irish Bank, Irish Nationwide Building Society and lender EBS. Irish Life & Permanent is also close to falling under the state's aegis.
Separately, Allied Irish, the country's second-largest lender, said its underlying loss widened to 2.6 billion euros in the first half from 2.1 billion euros at the same time a year earlier as bad debts climbed. The state already owns more than 90 percent of the lender.
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