While the debt market is almost closed, private equity firms are eyeing some opportunities. Distressed sponsors rather than distressed credits are one source of deal flow that has come into sharper focus.
Sponsors, including food-sector specialist Lion Capital and Blackstone, are understood to be looking at Dutch juice producer Refresco, currently owned by Icelandic investor FL Group – itself in administration.
Sponsors are also looking at Babcock & Brown’s European portfolio companies Eircom, the Irish telecoms incumbent, and Yellow Pages Israel, a directories business. Debt, however, remains at a premium for any deal – one factor prompting sponsors to explore unleveraged opportunities.
A private equity consortium is planning a €2.5bn–€3bn bid for a stake in Bank of Ireland that would support the Irish government’s plans to bring new equity into the banking sector. Bank of Ireland shares rose nearly 17% in early trade on Friday on the back of the news.
The move to bring in new equity to capitalise the Republic’s bank sector comes despite Ireland’s early response to the credit crisis, with a guarantee for bank liabilities worth about €440bn.
Irish media reported speculation that the government was seeking to create two enlarged banks based around Bank of Ireland and AIB. A government source told Reuters there were discussions about restructuring and consolidation but added that talk of two enlarged banks was inaccurate.
Cardinal Asset Management, a Dublin-based investment company, is reported to have put together a bid group including Carlyle and JC Flowers to buy a stake of up to 60% in Bank of Ireland.
Irish Life & Permanent is reported to be in preliminary takeover talks with the EBS building society.