Bank of Scotland sells Power for €25m

Bank of Scotland Ireland's venture capital arm, the former ICC Venture Capital, has made a financial killing after selling its remaining 11.8 per cent stake in bookmakers Power Leisure for more than €25 million.

The Bank of Scotland share sale was the major part of a placing of almost 6.7 million Power shares, which also included the sale of one million shares for €4.55 million by Power chairman Mr Stewart Kenny, who recently moved aside from the chief executive role.

The shares were placed with 30 Irish, British and European institutions - which included some new investors - by Goodbody Stockbrokers and ING Barings at €4.55 a share, a negligible 4.5 per cent discount on the previous traded price for Power shares. After the placing, the shares traded up to €4.75. The HBOS-owned Bank of Scotland Ireland, which acquired ICC Bank and its venture capital subsidiary last year, was one of the biggest venture capital investors in Power Leisure before the bookmaking firm floated on the Dublin and London stock markets in November 2000.

At the time of the flotation at €2.40 a share, the then ICC had a 17 per cent stake in Power, but this was reduced to 11.8 per cent after the bank sold 981,000 shares for €3.5 million in August last year.

There are no details available on how much Bank of Scotland Ireland invested in Power Leisure, but given the near-doubling in the share price since the November 2000 flotation, it is clear that the investment has been highly profitable for the venture capital group.

This is the second major asset disposal by the investor: late last year it realised €20 million from the sale of its 26 per cent stake in the Today FM radio station.

The other major venture capital investor in Power Leisure is the British group Hg Capital - the former Mercury Private Equity - which has a 6.5 per cent stake. Hg sold just 63,278 shares in the placing and is locked into Power until July 24th as are the directors with the exception of Mr Kenny.

Mr Kenny retains 2.5 million Power shares - more than 5 per cent of the firm - and has extended the lock-in period over these shares until next March. The two biggest non-institutional shareholders in Power - former chairman Mr John Corcoran and Mr David Power - sold no shares yesterday, but Mr Corcoran's wife Ann sold 100,000 shares.