IFG shares surge as it accepts €240m takeover bid

IFG shares surge as it accepts €240m takeover bid

Shares in Irish-founded financial services group IFG surged by over 43% on the back of the company accepting a €240m takeover offer and showing a return to profit.

UK private equity firm Epiris - via a subsidiary company called SaintMichelCo - has had its offer of £1.93 per share, or around £206m (€240m) in total, accepted by IFG's board, which in turn has recommended the offer to its shareholders.

The deal requires regulatory and shareholder approval before succeeding.

IFG's chief executive Kathryn Purves said the offer represents "a compelling opportunity for shareholders to realise an immediate and attractive cash value for their shareholding".

She said the transaction is "an excellent outcome for shareholders, for the company and for our clients".

IFG has shifted its entire focus to the UK in recent years and considered selling its Saunderson House financial advisory division last year before shelving those plans and, instead, setting ambitious near-term revenue targets for both it and its specialist pensions business James Hay.

Ms Purves said the sale of the entire group "should help accelerate the delivery of IFG's strategic objectives and the underlying strategies of James Hay and Saunderson House."

Davy said IFG's tentative acceptance of the deal follows a period of significant speculation regarding the future of the business.

"The all-cash offer removes uncertainty for shareholders, albeit the headline multiple of earnings is less eye-catching when considered in the context of projected earnings growth in the coming years," it said.

Also announcing annual results, IFG said it returned to profit in 2018, showing a pre-tax profit of £450,000 compared to a loss of £381,000 in 2017. The group also generated revenues of £87.6m in 2018; an increase of 12% on the previous year.

Operating profits at the James Hay business jumped from £6.1m to £10.3m, but Saunderson House's profits fell by over 17% to £7.1m.

The group said while it remains committed to a progressive dividend policy and intends to return to making pay-outs "at the earliest possible time", no dividend will be paid for 2018 in order to retain cash for potential exposures to certain legacy issues.

It also said that the impact of Brexit on its businesses is "difficult to predict" but said it is making "good progress" on its near-term priorities.

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