Bank of China leads bidders to acquire Goodbody

Bank of China is understood to be leading bidders for Goodbody Stockbrokers, nine months after a consortium from Beijing saw their €150 million bid to take over the company fall through.

Goodbody is being sold by Kerry-based financial services group Fexco, which owns 51 per cent of the business, and the brokerage firm's management and staff, who hold the remaining 49 per cent.

Goodbody's larger rival Davy also remains in the mix and would be more palatable to Fexco, given the difficulties encountered with the previous Chinese deal, which was struck in the middle of 2018 and involved a group led by Zhong Ze Culture Investment Holdings. However, a tie-up with Davy would result in significant job cuts.

Management

Goodbody management, led by chief executive Roy Barrett, and Fexco decided in January not to progress a sale to the Zhong Ze-led group, concerned by how the make-up of the Chinese consortium changed in the months following an initial agreement.

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While Irish Life is the final short-listed bidder this time around for Goodbody, sources said that it is a distant third in the race. Goodbody was founded 143 years' ago and has about 300 staff.

Spokesmen for Fexco, Goodbody, Davy and Irish Life declined to comment, while efforts to secure comment from Bank of China, which set up an Irish branch two years ago, were unsuccessful. The Chinese lender also owns an aircraft leasing operation, BOC Aviation (Ireland), in Dublin.

Fexco reported on Wednesday that its operating profit rose by 9.5 per cent to €17.5 million last year. Income grew across all divisions of the group which specialises in payments and foreign exchange.

Total income increased by 11 per cent to €236 million, while net assets edged up to €352.6 million at the end of the year from €324.7 million for the close of 2017, it said.

“We continue to reinvest in our core business and to drive growth through innovation and acquisitions to expand our position as a global fintech business,” said chief executive Denis McCarthy. “We retain a strong and conservatively managed balance sheet that means we have the capability to pursue further growth opportunities when they arise.”

Fexco, based in Killorglin, Co Kerry, employs more than 2,400 people and plans to open a new research and innovation centre in the global headquarters early next year.

Agreements

Recent developments at the company have seen it launch Metamo, a 50:50 joint venture between 16 of Ireland's largest credit unions and Fexco, in July. Metamo will support credit union viability and sustainability through the provision of a modernised suite of financial products.

In March, an agreement was reached with the Aviation Working Group for Fexco to develop and operate the global electronic aviation trading system e-ledger for the aircraft leasing and financing industry to simplify the business of selling aircraft which are subject to lease agreements.

Fexco’s key retail foreign exchange business now manages 150 branches and a further 900 agency and franchise locations, following the acquisition of Thomas Exchange Group in August 2018. The company has further growth ambitions for this business which it will achieve through the establishment of new strategic partnerships, it said.