Goodbody loses a second suitor as Bank of China deal falls through
Stockbrokers’ owner Fexco may have to sit tight and hope Covid-19 uncertainty wears off
Goodbody Stockbrokers boss Roy Barrett: Observers say it’s only a matter of time before the firm finds itself back on the market
Goodbody Stockbrokers’ managing director, Roy Barrett, has seen his fair share of clients’ deals fall apart in his almost quarter of a century in charge of the State’s longest-established brokerage.
But losing two sets of suitors for the business itself in the space of 18 months must be particularly tough. Staff were told on Friday afternoon that its would-be buyer, Bank of China, had walked away, citing “uncertainty” caused by Covid-19.
Many questioned why Goodbody and its majority owner, Fexco, chose Bank of China last November to acquire the 144-year-old brokerage, when a deal with another Beijing group, led by Zhong Ze Culture Investment Holdings, had already fallen through in January last year after months of toing and froing.
Fexco’s bread-and-butter foreign exchange business is being hit by the Covid-19 pandemic
The Irish side pulled the plug on that one, having become increasingly concerned about how the make-up of the Chinese consortium changed in the months following the agreement.
A second sale attempt last year drew a decent level of interest, but most – like shortlisted bidders Davy, Goodbody’s larger rival, and Irish Life – were really only after the wealth management part of Goodbody. An agreement with Bank of China seemed to be the only deal that would keep the business intact.
Goodbody was at pains to point out to clients on Friday afternoon that it continues to enjoy the support of Fexco, which owns 51 per cent of the company. But having made the decision two years ago that it was a seller, does it really retain any emotional attachment to the brokerage?
In addition, Fexco’s bread-and-butter foreign exchange business is being hit by the Covid-19 pandemic.
While it’s likely that Fexco and Goodbody management will have to sit tight until there is less economic and market uncertainty, industry observers say it’s only a matter of time before the firm finds itself back on the market.
Could third time be a charm?