AIB prices shares in M&T

Allied Irish Bank is to sell its 22.4% stake in US bank M&T at a price of $77.50 (€55.4) per share, a discount of about 1.8% on the current share price.

AIB, which yesterday announced the sale of its stake in the New York-based bank, said it was to sell in a public offering some 26,700,000 "notes", each of which would be exchangeable for a share in the bank when the sale is concluded.

AIB intends to hold an extraordinary general meeting on November 1 to seek shareholder approval of the offering.

The bank said the sale would generate net proceeds of around $2bn (€1.5bn), generating some €900m of equity capital.

AIB said it intends to use this equity capital to meet part of its €10.4bn capital reserve requirement as set out by the Financial Regulator.

The net cash proceeds will be used as an additional source of liquidity to support AIB's business activities.

M&T is a New York Stock Exchange-listed commercial banking business based in Buffalo, New York, with significant businesses in New York, Maryland, Pennsylvania and other eastern US states.

On June 30 M&T reported consolidated total assets of $68.2bn (€4.87bn), deposits of $47.5bn (€33.9bn) and shareholders' equity of $8.1bn (€5.8bn).

AIB recently sold its Polish banking interests to Spain's Santander for €2.5bn.