Ireland’s second biggest bank group, Bank of Ireland (BoI), has confirmed that it is in talks with management at its Davy Stockbrokers unit to launch a circa €350m buyout offer for the business. Davy is the largest stockbroker in the Republic of Ireland.
Management, already hold close to a 10% equity stake and 49% of the voting rights in the unit. The decision to pursue a buyout has been driven by a desire to retain and incentivise senior managers and executives with equity stakes.
Although a bid has long been expected, the price of between €330m (US$418m) and €350m (US$443m) currently under discussion is well above the level at which earlier proposals are thought to have been rejected.
Icelandic bank Landsbanki’s acquisition of a 50% stake in much smaller rival Merrion Capital for €27.65m is thought to have significantly raised Bank of Ireland’s value expectations for the Davy unit, which is one of the best known financial services brands in the country.
Davy’s veteran management, which includes chairman Brian Davy, deputy chairman Kyran McLaughlin and managing director Tony Garry, are likely to be behind the buyout offer.