Fairfax to make €255m on Bank of Ireland shares

Billionaire Prem Watsa's Fairfax Financial stands to make up to €255 million from the sale of shares in Bank of Ireland.

Fairfax said yesterday it was considering placing 935 million shares in the Irish lender with buyers at between 35.75 cent and 37.25 cent a share.

Offloading the shares at those prices would fetch between €334.3 million and the €348.3 million for the entire tranche, which amounts to 2.9 per cent of the bank.

Fairfax would have paid €93.5 million for the shares when it bought into the bank in 2011.

A placing at those prices would earn it a surplus of between €221 million and €255 million.

Bank of Ireland’s shares closed at 38.4 cent in Dublin ahead of news of Fairfax’s intention to sell some of its holding in the company.

Discount

The indicative price at which the shares are being offered by Fairfax is a discount of up to 6.9 per cent on their Dublin close.

Deutsche Bank

will place the shares with investors for the seller.

The listed investment group was one of a group of north American buyers that took a 35 per cent combined stake in the Irish lender in 2011, keeping it out of majority State ownership.

They bought into the bank just months after the European Union and International Monetary Fund were forced to bail out the Republic. Its shares were sold at about 10 cent each.

Another one of its backers was Wilbur Ross. Both men described Bank of Ireland as one of the best investments of the financial crisis when they sold a combined 6.4 per cent in the institution 12 months ago.

Toronto-listed Fairfax is paying $1.9 billion for insurer and specialist underwriter, Brit, under the terms of a deal agreed in February.