Planning for the initial public offering (IPO) of a 25% chunk in AIB was at a late stage when the Government debated the timing for the launch of the €3bn sale.
Already delayed by over a year, the IPO was slated to be one of the largest in Europe for some time and nerves of the expensively hired advisers were jangling.
The decision was taken to delay announcing the start of the sale process until after the French elections. That would avoid the chance far-right contender Marine Le Pen would defy the pollsters and plunge the eurozone into disarray.
With the presidential victory of centrist Emmanuel Macron, the UK election was next up for discussion. The go-ahead for the sale was decided on the basis British polls were predicting that Theresa May was heading for a seats landslide. A boost to sterling and to bank shares would provide the perfect backdrop .
The discussions over the timing showed the importance of sterling to the Government’s plans for the politically-tricky AIB sale. A calamitous slide would damage the sale. In the event, sterling fell heavily on the UK exit poll. But after rallying, it traded only 1.5% lower and came nowhere near matching its Brexit plunge of last summer. The reaction was a sign that advisers would not delay by much the planned issue of the AIB sales prospectus. The Eurostoxx Banks 50 index of leading European bank shares fell but rallied later.
A Department of Finance spokesman said: “The transaction timetable was designed to cater for the UK election. We remain on track to issue a price range prospectus over the next week or so.”
The Government may take a while longer. But following the UK election what is certain is that investors will want to pay less for their AIB shares.
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