Davy stockbrokers, one of the oldest and most prestigious brokers in the Irish market, is set to change hands after the managers of the business agreed a deal to buy it from Bank of Ireland - the second biggest bank in the State.
The deal, which may not close for another six weeks, values the business at some €344 million.
A small group of directors already owns 9.56 per cent of Davy, but the deal will result in as many as 100 of its more than 400 staff acquiring shares in the stockbroker. They will take out bank loans to pay about €310 million for the 90.44 per cent of Davy that Bank of Ireland owns.
The management team, led by chief executive Tony Garry and director Kyran McLaughlin, also includes chairman Brian Davy, whose father James Davy co-founded the company in 1926.
Former Dublin footballer Robbie Kelleher and former director David Shubotham are among the current manager shareholders, as is Brian McKiernan, head of the private client unit.
Bank of Ireland has had an interest in Davy since 1988, when it acquired shares in the company from Citibank. In a statement last night, the bank said that it had received a "conditional proposal" from Davy's management.
"As this proposal is subject to certain conditions, including funding and regulatory approval, there can be no certainty that a transaction will be concluded with Davy management," it said.
While talks on the transaction began as far back as February, it was only this week that the Bank of Ireland court (as its board of directors is known) decided to proceed with the transaction.
The deal may change the dynamic of the Irish stockbroking industry because the two biggest players have long been controlled by the two main banks. AIB, the largest bank in the State, owns Goodbody Stockbrokers, Davy's biggest rival. Davy makes annual pretax profits of some €40 million.
The broker has strived in recent times to capture a greater share of the lucrative private client business, which is in vogue thanks to the emergence of newer investment companies such as Quinlan Private. In principle at least, outright ownership of Davy should give its management greater flexibility and more opportunity to reward staff.
