Farmer Business Developments has raised €46 million from the sale of a 6 per cent stake in publicly quoted insurance group FBD.
The non-trading investment holding company will retain a 31 per cent interest in FBD. It plans to use the proceeds of the placing to buy out the 20 per cent stake in Farmer Business Developments held by the insurance division of Belgian-owned KBC Bank.
According to FBD chief executive Mr Philip Fitzsimons, KBC's interest in Farmer Business Developments is a historic one and it no longer makes much sense for the Belgians to hold a stake in an unquoted company. KBC separately owns a direct stake of nearly 23 per cent in FBD.
Aside from KBC, Farmer Business Developments largely comprises the 5,000 or so individual owners of FBD when it took its stock market listing in 1989.
The company has no plans for further share sales, Mr Fitzsimons said.
The 2.57 million shares sold yesterday represented 6.14 per cent of FBD and were placed at a price of €17.90 per share by Bloxham and Davy Stockbrokers.
Dealers welcomed the move, which is expected to improve liquidity in the stock, although nearly 70 per cent of the shares will remain in the hands of just four parties.
Aside from Farmer Business Developments' 31 per cent stake and KBC's 22.6 per cent share, Bank of Ireland Asset Management owns 8.7 per cent, while FBD Trust has 7.1 per cent.
Yesterday's sale took advantage of a strong rise in FBD shares, which are up by nearly 34 per cent year to date. The stock closed at €18.45 last night, down just five cents on the day.
