EBS sale ‘ongoing’ but no fait accompli

THE sale of the EBS is being viewed as an ongoing process as no real progress has been made this week despite reports that veteran American investor Wilbur Ross is to take control of the lender.

In an interview with CNBC, Mr Ross, who is part of a consortium led by Dublin-based company Cardinal Capital and international investment house Carlyle, confirmed he would like to buy EBS and would be open to looking at other investment opportunities in Ireland. However, he said CNBC’s reporting that he “will buy the troubled Irish Bank” appeared to be a touch of overenthusiastic editorialising.

While, four suitors are still in the frame for EBS – Irish Life & Permanent (IL&P) and private equity houses Doughty Hanson, the Cardinal consortium and JC Flowers – it is strongly suspected that IL&P and Cardinal will end up fighting it out for EBS in a two-horse race by the end of this month.

The sale of the building society is not expected to be finalised until October or November. The National Treasury Management Agency (NTMA), which is overseeing the process, is understood to be viewing the sale as an ongoing process.

At its first-half results announcement at the end of August, IL&P said it expected more clarity on the process, or a shortening of the list of interested parties, by the end of this month.

The phoney war between IL&P and the Cardinal consortium has already unofficially begun. IL&P, which hopes to merge its loss-making retail banking arm, Permanent TSB, with EBS, has consistently defended its chances of raising the necessary funds. The funds would include a €600 million to €700m rights issue in November if it gets takeover approval and has intimated that the cost of bailing out EBS to the state would lessen with its offer.

On the other side, Mr Ross hinted yesterday at the prospect of EBS customers being relieved of some of their mortgage debt if the private equity group was successful, although what kind of interest rate borrowers would be left with regarding the remainder of their debt remains unknown.


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