Prospective buyers size up Quinn Insurance; hope yet for Aer Arann; Montrose in head-hunting mode; time for a recovery plan
Lots of interest as Quinn sale nears
THE SALE of Quinn Insurance moved a step closer in recent days with the joint administrators at Grant Thornton supplying an information memorandum (IM) to interested parties.
Initially, 47 groups had lodged expressions of interest and received a “teaser” document some months ago.
Since then, some of the so-called “tyre kickers” have been removed from the process. But I understand more than 20 groups – and possibly as high as 32 – are still left in the mix and have received the IM.
A data room has been opened and a deadline for bids has been set for September 17th. The sale process is being handled by Macquarie.
All of the usual suspects are believed to be in the mix, including trade players Aviva, RSA, Allianz and FBD. Anglo Irish Bank is also said to be putting together a proposal with a trade player to take control of the business to protect its substantial exposure to the Quinn family. But the regulator might have something to say about that.
US insurer Liberty has also gone public with its interest in Quinn and is seen as the frontrunner in the race to take over the Cavan-based insurer.
There is believed to be private equity interest, too.
Quinn Insurance was put into administration on March 30th by the Financial Regulator. News flow has dried up of late but the business is thought to be performing well. It appears to be retaining more customers than originally projected to the extent that 75 redundancies planned for its office in Enniskillen were cancelled.
That’s positive news but the sooner the business is out of administration the better for everyone involved.
Aer Arann seeks uplift
THE WISDOM of investing in an Irish airline was perhaps starkly illustrated by recently filed accounts for Tailwind Nominees, the Aer Lingus pilots who took a stake a few years back to help stave off Ryanair’s cheeky bid.
Their investment was valued at €6.6 million at the end of 2009, having been worth more than €20 million three years ago.
Aer Lingus’s share price has rebounded of late but the pilots are still significantly under water.
It makes you wonder why three parties would be interested in investing in Aer Arann. This is an airline that has lost €18 million since the start of 2008 and is operating in the worst-performing economy in western Europe.
A group of investors led by entrepreneur Jerry Kennelly has already been namechecked, while Aer Lingus is believed to have introduced a “transport group” to Aer Arann.
Kennelly was cagey about his involvement when I contacted him this week. Having sold his online photo library Stockbyte in 2006 for $135 million to Getty Images, the Kerryman has the financial clout.
He is also close to Pádraig Ó Céidigh, Aer Arann’s owner. “It’s a great company,” Kennelly told me.
“There’s a great opportunity there.”
Aer Lingus will be keen for Aer Arann to remain flying. The regional routes to Britain that it operates for Aer Lingus are believed to be profitable.
The future of its other routes is less certain, particularly the taxpayer-funded Irish PSOs.
Whatever shape it takes, here’s hoping Aer Arann can be rescued. We could do with some good news.
RTÉ to cast net far and wide in search of DG
RTÉ WILL next week crank up its search for a new director general to replace Cathal Goan (inset) at Montrose.
The position will be advertised nationally on September 10th. I’m told that the State broadcaster has hired executive search group MERC Partners to trawl for potential external candidates.
It seems MERC will be casting its net overseas and a few names are already doing the rounds in media circles.
These include Anne Bulford the chief operating officer of Britain’s Channel 4, who stood in as interim chief executive lately.
An accountant by trade, Bulford formerly worked for the BBC.
Ken McQuarrie, director of BBC Scotland is also mentioned. He joined the ‘Beeb’ in 1975 and is a (Scots) Gaelic speaker.
Another possible target is Peter Fincham of ITV, who is believed to have gone for the top job at Channel 4.
He was controller of BBC 1 for two years until late 2007, having previously spent his career with independent production companies.
The suggestion is that RTÉ might want someone with more of a commercial experience on their CV.
Goan earned €326,000 as DG last year. Whether that would be enough to tempt someone to relocate here remains to be seen.
The appointment of an outsider would certainly create an interesting dynamic at RTÉ.
The smart money is still on an internal appointment.
Radio boss Clare Duignan is the hot favourite with many RTÉ staffers while finance chief Conor Hayes, who spent 25 years in the commercial sector before joining in 2001, also has his supporters.
As bad news piles up, we need plan from Lenihan
ANOTHER WEEK, another downgrade for Ireland Inc from a ratings agency.
This time it was Moody’s Investors Service downgrading Eircom’s parent company, ERC Ireland Finance Ltd.
It was hardly a surprise given the company’s admission on Tuesday that it could default on its debt in the next 12 to 18 months.
Separately, the latest monthly report from the Irish Stock Exchange highlighted the collapse in equity trading in Dublin over the past three years.
In August this year, the volume amounted to just under €2.9 billion. It was €16.6 billion in August 2007.
It makes you wonder how it can still support the Irish stockbroking industry, which has largely avoided the job loss carnage that has battered most other industries here.
On Tuesday, analysts at Deutsche Bank gave their verdict on Irish Life Permanent’s latest results.
The “risks to the investment case are substantial”, particularly if its Permanent TSB banking subsidiary could not be part of a third banking force, Deutsche said.
“Without this, it is not obvious that the bank is long term viable, in our view.”
That’s to say nothing of the rising unemployment figures, the flagging retail sales and the increase in mortgage arrears.
And then there is the elephant in the room – Anglo Irish Bank. Just how much will that bust institution cost us? The total is €24 million and counting.
Brian Lenihan might be satisfied that our economic performance has been stabilised and is turning a corner, but all the key indicators suggest otherwise.
We need a plan to get this country moving again and create jobs and one that doesn’t revolve around a load of waffle about the smart economy.
Over to you, Minister.
LITTLE THINGS
** Unlike many of the English Premier League football clubs it covers, Irish broadcaster Setanta Sports is set to net a tidy profit.
Chairman Dermod Dwyer, who is gearing up for the launch of the Convention Centre in Spencer Dock next week, told me that Setanta’s profit this year would be “greater” than €500,000 and is projected to “double” in 2011.
“Things are going very well,” he said, highlighting that the business employs 120 people here. “It has stabilised nicely. The board actively managed the rescue of the business last year.
“Since then, it has bedded itself down and has a large following in Ireland. It’s a very good success story.”
** At Tuesday’s results briefing, Kerry Group chief Stan McCarthy indicated that the second half of this year could be a busy one for acquisitions.
Kerry is a large player in the consumer foods market in the UK, as is fellow Irish chilled foods company Greencore, the world’s biggest sandwich maker.
So how about putting the two together?
“Theyre a high quality company, [with] very good assets and do a good job in the industry,” McCarthy said. “There could be merit in it but it’s not something that we’re looking at.”
** Carlsberg has called time on its sponsorship of comedy. It will “now focus across a range of consumer initiatives as alternatives to comedy”, the drinks group told me.
Carlsberg backed the Cat Laughs in Kilkenny and the Comedy Carnival in Dublin.
