BoI price dips as Ross disposes of 1.8bn shares

Sale three times oversubscribed with 60% of buyers from UK, 30% from US

New York based investor Wilbur Ross secured a price of 26.5 cent for his remaining 5.5 per cent stake, yielding him €477 million. Photograph: Simon Dawson/Bloomberg

New York based investor Wilbur Ross secured a price of 26.5 cent for his remaining 5.5 per cent stake, yielding him €477 million. Photograph: Simon Dawson/Bloomberg

Wed, Jun 11, 2014, 01:00

Bank of Ireland’s shares closed down 3.2 per cent at 27.5 cent in Dublin yesterday after US billionaire Wilbur Ross sold his remaining 1.8 billion shares in the bank.

Mr Ross secured a price of 26.5 cent for his remaining 5.5 per cent stake, yielding him €477 million. This is effectively his profit from his original investment in the bank in July 2011. The New York-based investor sold about a third of his stake in Bank of Ireland back in March, which covered the cost of his original €290 million investment.

Separately, the Minister for Finance Michael Noonan told the Dáil yesterday that he has no current intention to sell the State’s remaining 14 per cent stake in Bank of Ireland.

“We will bide our time and I have no current plans to start selling down our investment,” he said.

The sale price achieved by Mr Ross represented a 6.7 per cent discount on Bank of Ireland’s closing price on Monday. Not surprisingly, given the large volume of stock traded, Bank of Ireland was the most traded share on the Iseq index in Dublin yesterday.

 

Three times oversubscribed

 

It is understood the sale was three times oversubscribed and that the book closed at 8.30am. The share sale was executed by Deutsche Bank.

About 60 per cent of the buyers were UK based with about 30 per cent from the US. This will have the effect of diversifying the shareholder base. When Mr Ross invested in Bank of Ireland, about 70 per cent of the stock was held in North America while now this figure is less than half.

Mr Ross made public his decision to sell his remaining holding, on Monday night, citing an overconcentration on European bank assets by his company. He also stepped down as a non-executive director of Bank of Ireland.

He said the decision to sell was not a comment on either the bank’s future or the economic recovery in Ireland.

In a statement to the Dáil yesterday on the sale, Mr Noonan said: “The State remains an important and supportive shareholder in the bank and we will manage this investment in the best interests of the taxpayer.

“How does this particular transaction influence our investment? Well it is certainly encouraging that such a significant amount of shares could be sold in the market and it fully removes the perception of an overhang from Mr Ross.

“It also improves the depth and spread of shareholders in the bank, which augurs well for when we decide to sell, some or all of our stake. ”