Irish Permanent shareholders have overwhelmingly voted to merge with Irish Life. More than 300 shareholders attended an extraordinary general meeting in Dublin yesterday to approve the deal, with just a few disgruntled individuals casting doubts on the link-up.

The chairman, Mr John Bourke, opened the meeting by reminding shareholders about the company's success since it floated on the Stock Exchange in 1994. The company has prospered and so have the shareholders with a huge increase in the share price, but it is now time to move on, they were told. Mindful that it would lose its legislative protection against a takeover in September, the Irish Permanent had been considering a number of options, he said. The British bank Abbey National had a 10 per cent stake in Irish Permanent and speculation that it would eventually make a bid for the company helped to support the rise in the share price over the years.

"In practice, Abbey National was a model shareholder. Nevertheless, its presence did help to stimulate the thoughts which we would have had anyway about the long-term future of your company, and where it should position itself."

Mr Bourke said that throughout its deliberations, Irish Permanent kept coming back to the concept of a merger with Irish Life. "The story of the merger is I think a good one by any standards. Your directors are most excited about this momentous and, indeed, historic event and believe it is greatly in your interests."

Moreover, the shareholders seems to be broadly of that view.

Their queries ranged from the new dividend policy for shareholders of the merged entity and whether it would prove advantageous to Irish Life shareholders. One shareholder challenged the notion of a merger, citing the disastrous consequences for many companies which had taken the same path in recent time.

"Maybe mergers are not always in the company's best interest. In some cases we have seen that management end up taking their eye off the ball," he cautioned. Mr Bourke said Irish Permanent had great confidence in the new management team that would be heading the enlarged company and was confident that it would be good enough to make it work.

A number of shareholders pointed to the recent bad press associated with Irish Life, mentioning a strike by its sales force and incidence of "churning" life policies to increase brokers' commissions at their clients' expense.

Irish Permanent's finance director, Mr Peter Fitzpatrick, said it was satisfied the practice had ceased and had only ever related to a small proportion of Irish Life's policies.

"As far as we are concerned it has been thoroughly investigated. It did happen. It wasn't encouraged by management and the book is closed on the matter."

The absence of two of Irish Permanent's directors from the new board was also mentioned. Ms Eileen Lemass decided not to go forward on to the board of the new company, as did Mr Peter Ledbetter, Mr Bourke told the meeting.

Mr Ledbetter was managing director of Irish Permanent's Guinness & Mahon subsidiary and will be paid a total severance package of around £750,000. Mr Bourke said Mr Ledbetter's decision was "regrettable." His severance package was "very generous" but Mr Bourke insisted Mr Ledbetter "earned and deserved" it.

One woman wondered whether his departure was ominous for the future. Mr Ledbetter managed to sidestep the failed flotation of GPA, leaving the company well before it went to the market. "Is he like the canary in the mine? Is he getting out in time?" she asked.

Mr Bourke reassured shareholders that despite these concerns the merger was the best way forward for the company.

"This is the end of an era. Equally, it is the start of another, and potentially a most exciting one."