Bank of Ire­land in ad­vanced talks over sale of IBI Cor­po­rate Fi­nance

Talks at an ad­vanced stage as BoI pre­pares to part with ‘Ire­land’s top deal ad­viser’ Pos­si­ble sale comes at a time when bank aims to build up non-in­ter­est in­come else­where

The Irish Times - - Business Today - JOE BREN­NAN

Bank of Ire­land is in ad­vanced talks to sell its IBI Cor­po­rate Fi­nance unit to man­age­ment at the State’s lead­ing deal­mak­ing firm.

Sources have told The Ir­ish Times the bank has been in ne­go­ti­a­tions for some months with IBI chief ex­ec­u­tive Tom God­frey and man­ag­ing di­rec­tor Ted Webb about a po­ten­tial deal. They were not in a po­si­tion yes­ter­day to dis­close the fi­nan­cial terms be­ing dis­cussed.

News of the talks comes as Bank of Ire­land’s chief ex­ec­u­tive of 8½ years, Richie Boucher, pre­pares to re­tire early next month, to be suc­ceeded by HSBC ex­ec­u­tive Francesca McDon­agh. As a unit of Bank of Ire­land, the cor­po­rate fi­nance com­pany has been sub­ject to Gov­ern­ment-im­posed pay re­stric­tions at bailed-out lenders, in ex­is­tence since 2009.

Spokes­men for Bank of Ire­land and IBI de­clined to com­ment on the talks.

IBI, which was set up in 1966 as a joint ven­ture be­tween Bank of Ire­land and mer­chant banks Mor­gan Gren­fell and Schroders, is rou­tinely named by spe­cial­ist M&A pub­lisher, Merg­erMar­ket, as Ire­land’s top deal ad­viser, where its fo­cus is on work­ing with the sell­ers of as­sets.

Deals so far this year by IBI in­clude ad­vis­ing on Glan­bia’s dis­posal of 60 per cent stake in Dairy Ire­land to its largest share­holder, Glan­bia Co-Op­er­a­tive So­ci­ety, valu­ing the busi­ness at ¤340 mil­lion, and the agreed sale of a ma­jor­ity stake in meat group Dun­bia’s op­er­a­tions in the Repub­lic to ri­val Dawn Meats.

High-pro­file work by the com­pany in re­cent years in­clude ad­vis­ing the Gov­ern­ment, along with Credit Suisse, on the of­fload­ing of its 25 per cent stake in Aer Lin­gus to In­ter­na­tional

Air­lines Group (IAG) in 2015. It was also among firms work­ing with book­maker Paddy Power on its ¤11 bil­lion merger with Bet­fair, com­pleted early last year.

IBI’s web­site says that more than 80 per cent of trans­ac­tions in which it is in­volved are cross-bor­der in na­ture.

On the do­mes­tic front, IBI is cur­rently known to be man­ag­ing the sale of choco­late com­pany Lily O’Brien’s, which was put in the mar­ket ear­lier this year with a re­ported price tag of ¤50 mil­lion.

IBI was also deeply in­volved in ad­vis­ing Bank of Ire­land as it nav­i­gated its way through the fi­nan­cial cri­sis, leav­ing it as the only lender res­cued by tax­pay­ers to re­main out­side of State con­trol.

Dur­ing this time, Bank of Ire­land ap­proached the stock mar­ket three times for eq­uity in­vest­ment, raised ¤1.1 bil­lion in a res­cue in­vest­ment by a group of five North Amer­i­can firms, and im­posed losses on its ju­nior bond­hold­ers as its bad loans soared.

The cor­po­rate fi­nance unit is part of Bank of Ire­land’s cor­po­rate and trea­sury divi­sion headed by Michael Tor­pey. The bank’s fi­nan­cial re­ports do not give a break­down of IBI’s con­tri­bu­tion to group in­come.

Bank of Ire­land’s dis­cus­sions to sell IBI oc­cur at a time when the lender is seek­ing to build up non-in­ter­est in­come else­where in the busi­ness. The head of the bank’s re­tail Ire­land divi­sion, Liam McLough­lin, said in July that the com­pany would seek “op­por­tunis­tic” deals to grow its ¤4 bil­lion-plus pri­vate bank­ing as­sets un­der man­age­ment.

Last De­cem­ber, the bank bought Dublin-based Cove­stone As­set Man­age­ment, with ¤100 mil­lion of such as­sets.

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