Bank of Ireland confirms IBI Corporate Finance management buyout

Bank pay restrictions are said to have played a part in IBI buyout deal

IBI managing director Tedd Webb and chief executive Tom Godfrey are in advanced talks with Bank of Ireland. Photograph: Naoise Culhane

IBI managing director Tedd Webb and chief executive Tom Godfrey are in advanced talks with Bank of Ireland. Photograph: Naoise Culhane

 

Bank of Ireland confirmed on Friday that it had agreed terms on a management buyout at its IBI Corporate Finance.

The Irish Times first reported last week that the bank and IBI chief executive Tom Godfrey and managing director Tedd Webb were in advanced talks on a deal. IBI and Bank of Ireland declined to disclose financial details surrounding the transaction.

“This development will see our senior team manage the future strategic direction of the company and continue to strengthen our position as the leading adviser in the corporate finance market,” Mr Godfrey said. “Both parties have a very strong and cohesive relationship following a lengthy productive partnership, and I am pleased to say that Bank of Ireland will maintain a strong working relationship with IBI into the future.”

Mr Godfrey told The Irish Times that senior management in IBI will be given equity in the business and that the business will move out of Bank of Ireland offices on Burlington Road in Dublin 4 to a new premises in the coming months.

The agreement comes as Bank of Ireland’s chief executive of 8½ years, Richie Boucher, prepares to retire early next month. He will be succeeded by HSBC executive Francesca McDonagh.

Shackled

As a unit of Bank of Ireland, the corporate finance company has been shackled by Government-imposed pay restrictions at bailed-out lenders, in existence since 2009. Sources said that the pay restrictions were a determinant in IBI management’s move to buy out the business, as it put the company at a disadvantage to most other players in the Irish market in terms of attracting and retaining staff.

Mr Godfrey said the transaction was “about maintaining the good people that we have” and that Bank of Ireland will remain “a very important client”.

IBI, which was set up in 1966 as a joint venture between Bank of Ireland and merchant banks Morgan Grenfell and Schroders, is routinely named by specialist M&A publisher, MergerMarket, as Ireland’s top deal adviser. Its focus is on working with the sellers of assets.

The firm was also deeply involved in advising Bank of Ireland as it navigated its way through the financial crisis, leaving it as the only lender rescued by taxpayers to remain outside State control. During this time, Bank of Ireland approached the stock market three times for equity investment, raised €1.1 billion in a rescue investment by a group of five North American firms, and imposed losses on its junior bondholders as its bad loans soared.