FBD board rejects takeover approach from Dutch group

THE BOARD of FBD Holdings has rejected as “entirely without merit” the takeover approach for the insurance business from Dutch financial giant Eureko, owner of pensions and investment firm Friends First in the Republic.

FBD’s rejection of the approach came in a statement issued yesterday afternoon in which the company said it had received further correspondence from Eureko but no offer. There was no immediate comment from a spokeswoman for Eureko, which wants to merge FBD with Friends First and float the combined entity on the Irish stock exchange while retaining a controlling stake.

Shareholders in FBD are likely to question its management and board about the approach at the company’s annual general meeting tomorrow.

FBD shares closed on Friday at €30.50, implying a market capitalisation of a little more than €1 billion. Eureko’s approach values the business at some €36 per share, or roughly €1.2 billion.

“The board of FBD Holdings plc notes the continuing weekend press speculation and confirms that it has received a further letter from Eureko BV. The board again confirms that it has not received an offer, or an intention to make an offer,” the statement said.

“The board has, in conjunction with its advisers Goldman Sachs International and Goodbody Corporate Finance, considered all aspects of the approach and has concluded that it is entirely without merit. Accordingly, the board rejects this approach.”

Eureko is understood to have written to FBD on Friday, outlining the broad terms of a proposal in which its existing shareholders would be offered an opportunity to take a minority stake in the new vehicle. Investors would be offered a partial cash alternative to shares if they wished.

There has been no public comment on the approach from Farmer Business Development, a plc which owns 25.68 per cent of FBD. As the largest single investor in FBD, the stance adopted by its 4,500 shareholders will have a crucial bearing on the prospects of any Eureko bid.

The proposal from Eureko is understood to include a form of partnership with Farmer Business Development and with FBD Trust Co, a separately managed charity which holds 8.98 per cent of the insurer. There has been no comment from FBD Trust Co.

FBD shares, which traded at €40.32 a year ago, climbed 16.5 per cent to €34 this month after it said it had received a preliminary approach from Eureko.