The prospect of a merger between Anglo Irish Bank and First Active failed to enthuse the Irish market, with both shares marked down as some players questioned the logic of such a deal.
The market is still far from convinced that a deal will be agreed and that was reflected in the 20 cents fall by First Active to €2.30 and the 8 per cent fall by Anglo Irish to €2.57.
The general view is that, having made a virtue of concentrating on SME corporate banking and eschewing branch networks, Anglo Irish will need to present convincing arguments to its shareholders for what is effectively a takeover of a mortgage bank exposed to fierce competition.
The respective share prices also indicate that there is little room to manoeuvre if any share swap is not to be dilutive for Anglo Irish shareholders, who have seen their bank perform strongly in recent years by concentrating on a low-cost corporate banking service for SMEs. Elsewhere, leading industrial shares were firm, with Eircom bucking the downward trend in the telecom sector with a 17 cent rise to €3.97, while CRH remained well-bid, closing 80 cents stronger on €20.20. Independent was 20 cents higher on €8.50 after reports in British media that the flotation of its iTouch subsidiary is approaching. Some of the food stocks were weaker, with IAWS down 20 cents on €6.30 and Greencore 10 cents weaker on €2.90.
:quality(70)/cloudfront-eu-central-1.images.arcpublishing.com/irishtimes/VR3765MFOBH2NMV2QNICYDF67M.png)