Clock ticking on AIB’s offload bid; Basil Geoghegan jumps ship from Deutsche Bank; O2 and Tesco take long-term mobile view; BBC’s Motson on Setanta flirtation
AIB sale gets complicated
IT SEEMS that the clock is ticking on AIB’s attempt to sell its stake in Polish bank BZ WBK in more ways than one.
The bank is busily trying to offload its American, British and Polish assets to help recapitalise the business and stave off State ownership by the year-end deadline set by the financial regulator.
In Poland, AIB has a 70.4 per cent stake in BZ WBK, a profitable and sought-after company. The rest is listed on the stock market. The race to buy the business appears to have narrowed to three players – Poland’s PKO BP, Santander of Spain and France’s BNP Parisbas.
There are complexities though to the sale process. Market rules in Poland mean that anyone buying more than 66 per cent of a listed entity must bid for the entire share capital of that company.
So, if one of the shortlisted bidders wants to buy AIB’s stake, it will have to bid for the other shares, too.
KNF, the Polish financial regulator, however, likes its big retail banks to have a stock market listing and a free float of 25 to 30 per cent of its shares, thus complicating the sale.
It seems unlikely that anyone will announce a tender offer for 100 per cent of BZ WBK if they then have to sell down towards a 70 per cent level – something that might involve taking a financial hit.
The bidders could buy 65.9 per cent of AIB’s holding, with the Irish bank selling the balance into the market or to another buyer.
Analysts say AIB should have no difficulty offloading the surplus stake, but this could weigh on the BK WBK’s share price.
Poland is also implementing an EU directive relating to, among other things, significant shareholdings in public companies.
The impact is that it will lower the 66 per cent threshold. It will come into force in January 2011 so AIB will no doubt want to get a deal over the line before then to avoid any bidder falling foul of the regulation.
Delays to an acquisition of BZ WBK could include gaining approval from the KNF and Poland’s consumer and competition protection authority.
From Sunday, the rules relating to the acquisition of banks and financial institutions in Poland are being brought into line with EU regulations.
Under the new rules, the KNF is allowed 60 days to voice any objections to a proposed acquisition of a bank or financial institution – and it could need European Commission approval.
Still, at least there’s a bidding war in the offing with AIB’s stake worth €2 billion to €3 billion. AIB boss Colm Doherty will be keen to bank it quickly.
Irishman Geoghegan moves to Acision
AFTER 15 years in investment banking in London, Irishman Basil Geoghegan has left Deutsche Bank and joined software company Acision to become its chief development officer.
Geoghegan was with Deutsche for only a year. This followed a long stint with Goldman Sachs, during which he worked on several large Irish corporate transactions. These included the initial public offerings of software company Parthus, drinks group CC and the then State-owned airline Aer Lingus (and its subsequent defence against Ryanair's first bid).
Geoghegan was also involved in the taking private of Eircom.
"I've had a good market share [in Ireland] . . . it's been a lot of fun. I've had a great run," he told me this week. Geoghegan's move to Deutsche last year raised a few eyebrows and this latest switch is likely to have the same impact.
So why the change?
"Brian Long asked me to do it and I thought that after 15 years in investment banking if I let the opportunity pass I may regret it," he says.
Acision, which is based in Britain, provides SMS and MMS software to mobile phone operators and manages mobile data.
It is backed by Atlantic Bridge (which numbers Long as a backer) and Len Blavatnik's Access Industries.
Geoghegan, who has a small investment in the company, will have input into strategy, financing and mergers and acquisitions.
"It will be an interesting challenge."
Geoghegan has also taken over from Peter Sutherland as chairman of the Ireland Fund in Britain.
This group has raised a couple of million pounds in recent years to help the so-called "forgotten Irish" – those who emigrated in the 50s and 60s and have fallen on hard times.
Tesco Mobile gets extra €2m in loans
IT APPEARS that mobile operator O2 and supermarket giant Tesco are having to take a longer-term view on their Irish mobile phone joint venture set up in 2007.
Accounts just filed for Tesco Mobile Ireland Ltd show that the two companies have given the business an additional €2 million in interest-free loans, having already pumped €11 million into the venture.
Tesco Mobile, which offers a low-cost, pre-paid service, was due to start repaying its loans in December of this year, with a payment of €1.5 million slated. However this has been pushed out to 2011 and 2012.
"The agreement is being renegotiated which will extend the amount borrowed by a further €2 million and the repayment period into 2011 and 2012," the accounts state.
"Accordingly, the directors believe that the company will have sufficient funding for its operating requirements for this period, and therefore consider it appropriate to adopt the going concern basis in the preparation of the financial statements."
The accounts show that the deficit in its retained earnings rose to €13.4 million last year from €8.9 million in 2008.
The company's eight employees appear to be well remunerated. Tesco Mobile paid €798,000 in wages and salaries last year and €26,000 in share-based payments.
Motty recalls unlikely Setanta Sports transfer talk
AS AN avid football fan I couldn't resist picking up a copy of the "now updated" autobiography of veteran BBC football commentator John Motson.
Good old Motty rattled through the years recalling famous matches and interviews with the likes of Brian Clough.
He also detailed how our very own Setanta Sports tried to poach him in 2007 as it made a push to challenge Sky.
Setanta, you will recall, hoovered up Premier League, FA Cup and England World Cup matches, leaving the BBC and Motson out in the cold.
Motty met Trevor East, whom Setanta had poached from Sky to run the shop in Britain. "There was a moment when I prepared myself to go, believing I had at least another two years of live broadcasting in the tank," Motty recalled. "But whether for financial reasons or the fact that Trevor's board of directors wanted somebody younger, the deal never got off the ground.
"On reflection, it was probably for the best and not only because Setanta went out of business a year later. It would have been a wrench to leave the BBC and start all over again at the age of 63."
There are some pairs that should never be separated, and Motty and the BBC are one of them.
LITTLE THINGS
After years of sending its 100 pilots to Toulouse twice a year for training, Aer Arann has secured its first ATR flight simulator in Ireland.
Earlier this week, the airline held a media day to show off the shiny €7 million simulator, which is managed by Simtech Aviation in St Margaret's near Dublin airport.
Aer Arann will be the anchor client, signing up for 1,500 hours a year with the simulator.
With training now taking place in Ireland rather than France, Aer Arann will save on costs while it will also be able to generate revenue training pilots from other airlines and countries.
I'm happy to report that I didn't crash on my test run. But I won't be pursuing a career as a pilot either.
Sticking with aviation, Dómhnal Slattery's new aircraft leasing business has recruited Michael Lillis to chair its Latin American advisory board.
Lillis is a former Irish diplomat and former head of GECAS' Latin America and Caribbean business.
He worked with Tony Ryan in his Shannon-based aircraft leasing group GPA, which was taken over by GE.
Six per cent of Irish people think that Manchester United are still sponsored by Vodafone, according to a survey carried out on the eve of the new football season by Pembroke Communications for cable TV company UPC.
Insurer Aon signed up recently to sponsor United, replacing AIG, which in turn had taken over from Vodafone a few years back.
Just shy of 17 per cent of the 412 people who were polled thought that Carlsberg's name (probably) adorns the Liverpool shirt.
In fact, Standard Chartered is the cash-strapped club's new sponsor.
It's not clear if those who were surveyed had a pint or two on board when they were asked the questions.
