US billionaire to sell remaining stake in Bank of Ireland

US billionaire investor Wilbur Ross surprised the markets yesterday by announcing his intention to sell his remaining 5.5 per cent stake in Bank of Ireland in a move that will almost triple the value of his original investment in 2011.

Mr Ross is also resigning as a non-executive director of the bank, a position he took up in June 2012.

Deutsche Bank confirmed yesterday that it was selling Mr Ross's remaining 1.8 billion shares in the bank. These are to be sold at between 26 and 27.5 cent each, valuing his stake at between €468 million and €495 million.

An earlier sale of shares in March netted him about €339 million. So his original €290 million investment in Bank of Ireland could return him up to €834 million.

Mr Ross told The Irish Times that his decision to sell his remaining shares had nothing to do with the prospects for the Irish economic recovery or Bank of Ireland. “The future is bright for both,” he said.

“With the appreciation of both our US and European bank investment, we had too much portfolio concentration in banks, but some of our other positions were private or had trading restrictions and our investors like us to periodically distribute gains,” he added.

He said Bank of Ireland had been a "terrific investment" for the company and expressed his confidence that its chief executive, Richie Boucher, would "lead the bank to a better performance in the years to come".

Mr Ross said he would “sorely” miss his involvement on the board of the bank.

State control

Mr Ross’s investment company, WL Ross & Co, was one of a group of North American investors that acquired a 34.9 per cent share in Bank of Ireland in July 2011 to keep the bank out of state control.

He originally held a 9 per cent stake, having acquired the shares for 10 cent each. He then sold a large tranche in early March to cut his holding to 5.5 per cent.

At that time, Mr Ross told The Irish Times that he had “no intention” of selling down his remaining stake.

Fairfax Financial chairman and chief executive Prem Watsa told Bloomberg yesterday that his company would continue to hold its shares in Bank of Ireland for the long term. Fairfax invested in Bank of Ireland at the same time as Mr Ross and sold down a similar-sized stake in early March.

In a statement last night, Bank of Ireland noted Mr Ross’s intention to sell his remaining shares and his resignation as a director of the bank. The bank said it appreciated comments made by Mr Ross to media regarding the rationale for the share placing.

Mr Kane added: “On behalf of the board I would like to thank Wilbur for his contribution, diligence and commitment as a board member. Wilbur was instrumental in the success of the 2011 capital raising and throughout his tenure, we have benefited greatly from his insights.”