TWO POTENTIAL bidders for IFG are set to begin due diligence on the company in the next 10 days, the financial services and pensions company said yesterday.
Addressing shareholders at the company’s agm, chairman Joe Moran said the first indicative offer received by the company on April 21st from a third party, believed to be Bregal Capital, had been insufficient.
“Discussions continued and that party subsequently increased its proposed conditional offer on May 11th,” Mr Moran said.
A second approach, from a consortium including IFG’s majority shareholder Fiordland, was made two days later, he said, with the terms of this conditional offer received on June 7th.
Responding to a question from one shareholder as to whether there had been an “inordinate time gap” between the initial expression of offers of interest for the company and the commencement of due diligence, Mr Moran said the company “had to get an indicative offer, conditional though it was, that was in line with market expectations and what our advisers thought was reasonable”.
Shareholders were told that no indication of the possible sale price could be disclosed, to ensure the company “could get the best for shareholders”.
According to chief executive Mark Bourke, the due diligence process will last a “maximum of six and minimum of four weeks” after which bidders will have to make a firm offer or walk away.
Asked whether the potential buyer would be interested in the Irish division of the business, Mr Moran said the bidders were interested in the “entire business”.
“They have not disclosed their plans to us except that they’re both committed to expanding the business,” he said.
Mr Moran added that he expects the existing management would stay in place following the sale. “It’s not a trading buyer so they would need the management.”
IFG, which was a significant player in the Irish mortgage and pensions market, has focused its attention on the UK pensions market in the last number of years, particularly since the acquisition of British pension provider James Hay.
The company’s UK business represented 57 per cent of 2010 profits.
According to the company’s trading update published yesterday, IFG’s Irish pensions and advisory business “performed well in terms of client wins and profitability” in the first four months of the year, though its general broking business “continues to operate in a difficult environment due to a lack of capital and transactions”.
On the issue of the company’s location following any deal, Mr Bourke said the question of the headquarters would become a “moot” one if IFG came off the market.
“It would really be about where the operating businesses are.”
