First Active to delist as part of 887m takeover by Royal Bank of Scotland

THE bell tolls for First Active’s short life as a publicly-quoted company tomorrow.

Shares in the former First National building society will be traded for the last time in Dublin before the company delists on Monday as part of its 887 million takeover by Royal Bank of Scotland.

Investors who watched First Active shares jump by over 30% from 4.65 to 6.13, when details of the takeover were announced on October 6, will think kindly of chief executive Cormac McCarthy, who delivered a deal that few would have thought possible as recently as 2000. Back then, the share price languished around the 2 mark as a series of boardroom changes, high-profile departures and strategy rethinks left investors looking for the least painful way out.

The company will dispatch payments to shareholders by January 19. Shareholders who received free shares when First Active converted from mutual status in 1998 can look forward to typical payments of between 3,000 and 6,150. These payments will be subject to Capital Gains Tax (CGT) at a rate of 20%, resulting in bills of up to 1,230, although most investors will be able to offset the annual CGT exemption threshold of 1,270 to reduce this liability to 976. First Active will offer shareholders a special deposit account for a limited time. while they make up their minds how to deal with their windfall.

The Irish Stock Exchange will be less happy to see the end of First Active’s life as an independent entity. The exchange has been starved of new blood seeking a listing and has seen no flotations since Paddy Power came to the market in 2000. Since then, the exchange has struggled to shake off the image of a peripheral backwater and has suffered the losses of heavy-hitting large cap stocks like Eircom, Smurfit and Arnotts, as well as the fall from grace of former giant Elan and the aborted float of drinks group C&C.

The exchange has also watched from the sidelines as a number of companies with Irish connections have made their market debuts in London, such as music group Mean Fiddler and first aid product developer Alltracel Pharmaceuticals. Cork-based biopharmaceutical company EiRx Therapeutics will be the latest Irish company to look for funding in London when its planned flotation takes place on January 12.

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