IRISH LIFE & Permanent has re-emerged as a potential suitor for the EBS after the building society said it was expanding its discussions with private equity investors to include other parties.
The EBS had been negotiating with an investment consortium led by Cardinal Asset Management and including US private equity firm JC Flowers since March.
Yesterday the 75-year-old building society, in a statement to the stock exchange, announced it was “widening” those discussions to include “other potential interested parties”.
Irish Life & Permanent yesterday declined to confirm whether it had already approached EBS, but indicated that discussions with the State-controlled building society would get under way imminently.
A spokesman for IL&P said that the company had previously indicated its interest in exploring opportunities for the two businesses to work together and that the company looked forward to beginning this process “in the coming weeks”.
Businessman Nigel McDermott, who with Nick Corcoran is an investor in Cardinal Asset Management, said yesterday that the consortium was still actively in discussions with the EBS.
The EBS also confirmed that the discussions with the Cardinal Asset Management-backed investment consortium were ongoing and at an early stage.
It had been expected that Irish Life & Permanent would be the main stakeholder in the proposed “third force” in Irish banking which was also to include the EBS and Irish Nationwide.
This idea had been losing momentum in recent months, however, after the European Commission expressed concern about the merger of the above two State-supported financial institutions.
Irish Life & Permanent, whose share price has been struggling of late, is the only Irish financial institution not involved in Nama, the National Asset Management agency. Last month the banking and pensions group said it may bid for ICS Building Society when Bank of Ireland puts it up for sale later this year.
A Department of Finance spokesman said yesterday that the department’s position was unchanged since March, when the Minister for Finance indicated he was open to the EBS raising outside private capital. It needs €875 million to meet the core equity ratio of 7 per cent set by the Financial Regulator.
The Government said it would provide the funds necessary if private capital was not forthcoming. Just under two weeks ago, the State injected €100 million into the building society through issuing special investment shares and committed itself to providing a further €775 million in tranches of €78 million over 10 years, if private investment could not be found.
Last week the State-controlled EBS, which submitted its restructuring plan to the Department of Finance and the European Commission on May 31st, secured approval from the European Commission for the €875 million capital commitment from the Government.
