A PRIVATE equity firm owned by Edmund Truell, the financier behind Fiordland, IFG’s largest shareholder, is to make an approach for IFG.
This follows IFG’s announcement just over two weeks ago that it had received a preliminary approach, believed to be from private equity firm Bregal Capital.
Disruptive Capital Finance, a private equity vehicle owned by Mr Treull, is believed to be behind the second approach.
Fiordland holds more than 19 per cent of IFG. The entity encompasses a group of private investors, led by Mr Treull, who invested approximately €25 million in IFG to part-fund IFG’s acquisition of British pensions company James Hay in late 2009.
One of the best-known figures in the European private equity world, Mr Treull is the founder of Pension Corporation, a specialist insurer which focuses on buying out companies’ pension deficits. Mr Treull has in the past strongly indicated his company would be interested in acquisition targets.
Since its acquisition of James Hay, IFG has become the leading player in the bespoke self-invested personal pensions (SIPP) market in Britain, a high-growth area in the pensions industry.
IFG’s share price, which had been trading around the €1.30- €1.40 level for most of this year, has soared following the announcement of the preliminary offer on May 4th.
IFG’s share price closed at €1.75 in Dublin yesterday evening.
There is broad consensus in the market that IFG is undervalued and any bid is expected to value the company at a significant premium to its current market price, most likely over €2.
Other significant shareholders in IFG include institutional shareholders Dexia and Nordea Bank Danmark, UK hedge fund Promethean, and TS Capital, an investment vehicle for Philip Lynch’s One51 which owned approximately 4.5 per cent of the company at April 20th.
In its announcement of May 4th, IFG said the approach was “preliminary in nature” and subject to a number of conditions.
“Accordingly, no assurances can be given that a formal offer will be forthcoming or that any transaction will occur.”
IFG issued an interim management statement earlier this week, in which it reported a good start to the year, though it said its Irish general brokering business continues to face a difficult environment due to a lack of capital and transactions.
The company’s UK business segment accounted for 57 per cent of the company’s profits in 2010.
IFG had 39,206 SIPPs under administration at the end of April.
The company – whose low debt level is perceived as one of its key strengths – concluded a refinancing of its gross debt during the first four months of the year.
