Minister hedges bets on sale of ICC to B of I

THE Minister for Finance, Mr McCreevy, will be "looking at all the options" in relation to the sale of ICC Bank, after it emerged that Bank of Ireland was the only bidder left in the race. A sale of ICC to Bank of Ireland is still seen as likely, but the Minister appears to be keeping open the option of deferring the sale if the bank is not prepared to offer what he believes is an appropriate price.

The sale process is ongoing, according to a spokeswoman for the Minister. It now appears that Bank of Ireland will undertake detailed due diligence of ICC's books and then make a final offer.

Provided this is acceptable to the Minister, the sale looks set to go ahead. The alternative for the Minister would be to defer the sale and hope to fetch a higher price at a later date. However, as the sale process has gone so far this would be a fairly drastic step and there is no guarantee ICC would fetch more in a year or two's time.

The likely sale price for ICC has been speculated as being in excess of £300 million (€381 million). However, since the Government has put the bank on the market the value of bank shares has fallen. This, together with the absence of a bidding competition, appears to have led to some nervousness in the Department of Finance that an appropriate price for the bank may not be received.

The fall in financial shares also raises questions about the plan, approved by the Government, to merge TSB and ACCBank and immediately float the merged entity on the stock market next year.

Given the relatively small scale of the merged bank and the low rating given to bank stocks on the market at the moment, floating the merged group may prove difficult, unless there is a strong recovery in the fortunes of financial stocks and of the Irish market in general.