High Court clears path for State to sell shares in AIB

Michael Noonan could move on AIB stock market listing next week

Shares in AIB declined by 6.5 per cent to €8.60 in trading in Dublin on Friday. Photograph: Leah Farrell/RollingNews.ie

Shares in AIB declined by 6.5 per cent to €8.60 in trading in Dublin on Friday. Photograph: Leah Farrell/RollingNews.ie

 

The High Court has struck out a businessman’s action aimed at preventing the Government from selling shares in AIB. This clears the path for Minister for Finance Michael Noonan to press the button on an initial public offering (IPO) of AIB shares, possibly as early as next week.

The Government and its IPO advisers are expected to assess the performance of global stock markets on Monday before deciding if they should announce their intention to float 25 per cent of AIB.

The Minister has already signalled that the first window of opportunity to IPO shares in AIB this year is between May and early July. With four weeks required from the time the intention to float is announced to the commencent of trading in shares, this means Mr Noonan has until June 9th to give the green light for an IPO.

On Friday, Mr Justice Paul Gilligan said the proceedings brought by Dublin businessman Vincent O’Donoghue to prevent the sale of shares in AIB could not succeed.

In proceedings against AIB, the Minister for Finance, the Government and the State, Mr O’Donoghue, representing himself, sought a declaration that the proposed sale was contrary to the common good and unlawful.

The defendants brought a preliminary application to have his case struck out as bound to fail.

Granting that application, the judge said allowing this case would be an abuse of process and the claims were frivolous, vexatious and bound to fail.

In his action, Mr O’Donoghue claimed AIB’s “long and sorry history of catastrophic governance failures” demonstrated it was “incapable of operating in a lawful, responsible and compliant manner”.

If returned to private ownership, AIB would have the sole focus of “relentlessly pursuing profits” for mostly foreign shareholders, he claimed.

Shares in AIB declined by 6.5 per cent to €8.60 in trading in Dublin on Friday but this was largely irrelevant given that the State owns 99.9 per cent of the bank.

IPO process

Once the stock exchanges in Dublin and London receive notice of AIB’s intention to float, a pre-deal investor education programme would be undertaken. Some two weeks later, the prospectus would be published along with the price range. The company’s management would then begin an investor roadshow, with the investment banks advising on the IPO commencing a bookbuilding exercise to test investor demand. The pricing would then be finalised and the allocation of shares to investors announced. This would be followed by conditional trading in the shares, after which the shares would be admitted to full trading on the stock exchanges.

Retail investors interested in the IPO will be required to register with a participating intermediary before the publication of the prospectus. They will be required to purchase a minimum €10,000 of stock in the offering.