European Commission expected to approve Anglo takeover

THE European Commission could approve Anglo Irish Bank’s effective takeover of Arnotts within the next two weeks.

Monday, August 9, has been set as a deadline for objections to be lodged with Brussels over the joint plan by Anglo and Ulster Bank to take control of the Dublin-based department store retailer, in a bid to recoup combined debts of around €260 million owed to them.

While that figure hasn’t been broken down, it is thought that Anglo is owed the brunt of the money from Arnotts — although the nationalised bank, which itself is controversially receiving more than €22 billion of taxpayer’s money in order to keep afloat, declined to comment yesterday.

Arnotts Holdings Ltd — the holding company for the iconic department store — moved quickly to stress that the business will remain trading as normal and job numbers are not at risk by the developments.

It added the Arnotts business “is performing very strongly, with trading for the first half of the year ahead of the Irish retail market”.

The European Commission — Brussels’ involvement with this case stems from the simple fact that a state-owned entity, namely Anglo, is involved — will begin its deliberations on Monday week, after which it can either reach a swift decision (full approval is expected) or extend its investigation time by anything up to three months.

Arnotts’ combined debt to the two banks in question was generated mainly by its ambitious €750m ‘Northern Quarter’ redevelopment plan — which would have, before being effectively mothballed, revamped the company’s stretch of property around Abbey Street into a village-like retail and leisure complex.

Currently the Arnotts business is 55% owned by the Nesbitt family, with Anglo Irish Bank and Boundary Capital owning the remainder.

Approval from the European Commission next month, for Anglo’s plan, will effectively see the Nesbitt family’s influence evaporate “overnight” and give the banks full power to do whatever they deem appropriate to retrieve money.

That could either see some of Arnotts’ significant property portfolio sold off or the retailer, in its entirety, sold.