Tags: wilbur ross | bank of ireland | stock | shares

Wilbur Ross Sells Some Bank of Ireland Shares After Tripling Money

Tuesday, 04 Mar 2014 07:34 AM

Wilbur Ross, the U.S. billionaire investor in struggling industries, is selling part of his stake in Bank of Ireland Plc, more than tripling his money with his bet on the lender.

Deutsche Bank AG said it’s acting as a placing agent for about 2 billion Bank of Ireland shares on behalf of Ross and Fairfax Financial Holdings Ltd. Davy, Ireland’s largest securities firm, is also placing the shares, which represent a 6.4 percent stake in Ireland’s largest lender by assets.

The shares, bought by Ross and Fairfax for 10 cents in 2011, are being offered for about 33 cents each, according to people with knowledge of the matter, who asked not to be named because the sale is ongoing. The bank is now trading profitably again for the first time since 2008, as soured loans are beginning to decline following a real-estate market collapse.

“Given the appreciation in the bank’s share price and its current premium valuation, we are not surprised to see some of the original North American anchor investors move to take some cash off the table,” said Ciaran Callaghan, an analyst at Dublin-based Merrion Capital. “In some sense, they have done their job and made their return.”

Bank of Ireland is alone among the country’s banks to avoid being seized by the state in the past five years after Ross’s WL Ross & Co., Fairfax and three other investors paid about 1.1 billion euros ($1.5 billion) in 2011 for a 34.9 percent stake in the lender.

Troubled Banks

The sale represents more than a third of Ross and Fairfax’s stakes in the bank. The 2011 investors, which also included Fidelity Investments, Kennedy-Wilson Holdings Inc. and the Capital Group, helped the lender avoid nationalization, as a raft of its rivals fell under government ownership.

Ross, 76, sought out troubled banks as the financial crisis hit in 2008. His firm was one of four private-equity groups that paid $900 million for the failed BankUnited Inc., purchasing it from the Federal Deposit Insurance Corp. in May 2009.

While WL Ross and Fairfax each acquired 9.3 percent of Bank of Ireland, their stake fell when the lender sold 580 million euros of shares in December to partly refinance the state’s 4.8 billion-euro bailout of the lender since 2009.

Bank of Ireland fell 7.5 percent to 33 cents as of 10:40 a.m. in Dublin trading. Still, the shares have advanced 146 percent in the past year, giving the lender a market value of 10.8 billion euros.

Job Cuts

Chief Executive Officer Richie Boucher, in the job five years, has shrunk the bank’s balance sheet, returned 6 billion euros to taxpayers and cut about 2,000 jobs since the five investors took a stake in the bank.

Pat Farrell, a spokesman for the bank, declined to comment on any sale of shares. Calls and an e-mail to Toronto-based Fairfax weren’t immediately returned. New York-based Ross also didn’t immediately respond to an e-mail seeking comment.

“While possible supply may temper share price performance, we are still fans of the Bank of Ireland story over the medium term and would regard any technical weakness as an opportunity,” said Eamonn Hughes, an analyst at Dublin-based Goodbody Stockbrokers, who rates the stock a buy.


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Wilbur Ross, the U.S. billionaire investor in struggling industries, is selling part of his stake in Bank of Ireland Plc, more than tripling his money with his bet on the lender.
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2014-34-04
Tuesday, 04 Mar 2014 07:34 AM
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