The competition to buy ICC Bank is expected to become a two-horse race between Bank of Ireland and Irish Intercontinental Bank (IIB), a subsidiary of Belgium's KBC, when revised bids are tabled later this month.
It is understood that National Australia Bank, which owns National Irish Bank (NIB) and Northern Bank and has been reported to be among those bidding for the State-owned institution, is not interested in purchasing ICC and has not been among those looking at the bank's books.
Following the recent short-listing of bidders, three possible buyers have been conducting due diligence operations of the bank's accounts. Market sources suggest they are Bank of Ireland, IIB and the Dutch bank, Nationale Investerings (DNIB).
However, the Amsterdam-based bank, which is 50 per cent owned by the Dutch government, has no existing presence in this market and is not expected to figure in the final shake-up, sources say.
Instead the competition is expected to come down to Bank of Ireland, which has long been regarded a frontrunner to buy ICC, and IIB. Revised bids should be received in the week beginning October 18th.
ICC Bank is expected to make £330 million (€419 million), but the final figure will depend on how keen rival bidders are to acquire it.
ICC would prove a good fit for Bank of Ireland, helping it to challenge AIB's dominance in the small and medium-sized business market. ICC would also add significantly to IIB's presence in the market. IIB specialises in serving larger companies and in areas such as aircraft finance, so there would be little or no business or staffing overlap if it bought ICC. IIB is now 100 per cent owned by KBC, which bought out Irish Life's stake after the Irish company merged with Irish Permanent.
A number of other parties who were expected to bid for ICC failed even to enter the tender process.
Irish Life & Permanent had been expected to bid, but ruled itself out before the deadline for initial submissions in August. Anglo-Irish Bank and Ulster Bank also failed to table bids.
When the revised bids are received later this month, ICC management and ABN-Amro corporate finance, the Government's advisers on the sale, will select the most appropriate offer and make a recommendation to the Minister for Finance.
Because it is a publicly quoted company, the bank's board must approve the offer. If there is a clear winner among the revised bids, exclusive negotiations can then begin with that party, but if the bids are close, extra time may be allowed for reconsidered offers.
The advisers are hoping the sale can be completed in November.
