At first glance, it might seem very flattering for AIB that sections of the market gave serious consideration to rumours that a £15 billion (€19 billion) takeover bid was winging its way from London, Frankfurt or Amsterdam. But the word is that the top guys over in Bankcentre are less than enthused about the way the AIB share price was driven up to record levels - solely on the basis of takeover talk that any basic analysis would have shown up as off the wall.
The takeover rumours - starting off with ABN as the suitor, and then followed by Deutsche and Lloyds TSB - generated a feeding frenzy that no doubt brought a smile to those on the London market who placed the rumours and made a quick killing. But brokers in Dublin are concerned for the image of Irish stocks as a result of the rise and fall of AIB in recent weeks.
The common view was that if the price of the market's biggest company which makes up 25 per cent of the ISEQ index could be so easily ramped by investors out for a quick killing, then it does little for the image of Irish shares and the Irish market in general.
The fact that sections of the British financial media swallowed the rumours - hook, line and sinker - is, to say, the least unfortunate. Regularly, we were told by market reporters in the British broadsheets: "Expect a bid for AIB as early as today!" It was bad enough that ramping of some exploration stocks gave the Irish market a lousy image in years gone by, but when the price of the biggest blue-chip in the State can be driven to ridiculous levels by rumour alone it becomes a different matter. No wonder they are not best pleased out in Bankcentre. Against that background, it's interesting to see that AIB is planning to beef up its investor relations programme in the US, having hired specialist investor relations consultant D.F. King & Company for the job.
D.F. King's clients include more than 100 of the Fortune 500 companies and a large number of the Fortune Global 500. The group deals in investor relations and financial PR and is seen on Wall Street as a heavy-hitter in the field. Interesting to see how events of the past couple of weeks will influence D.F. King as it tries to get the attractions of AIB over to a wider range of US investors.
AIB, of course, reports full-year results next week, and the group will be the first Irish company to report a profit of more than one billion - euros that is - or around £790 million. That'll give the headline writers the opportunity to get in the £2 million-profit-a-day soundbite!
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