State adds to list of groups who can sell AIB shares to public

Department warns would-be investors to seek independent advice before applying

The sale of a 25 per cent stake in AIB to stock market investors is expected to raise about €3 billion for the Government. Photograph: Cyril Byrne

The sale of a 25 per cent stake in AIB to stock market investors is expected to raise about €3 billion for the Government. Photograph: Cyril Byrne

 

The Government has added more firms to the list of intermediaries through which the public can buy shares in the upcoming flotation of State-owned AIB.

The Irish units of two UK-owned firms, Quilter Cheviot and Redmayne-Bentley, have been added to the existing list of six companies through which retail investors,effectively members of the public, can buy AIB stock.

Davy, Goodbody, Investec, Cantor Fitzgerald, Merrion Private and Campbell O’Connor are already on the list of intermediaries that can deal with retail investors.

The minimum investment has been set at €10,000 and would-be investors need to be registered as a client of one of the participating brokerages by the close of business on June 16th in order to apply for stock being sold.

Minister for Finance Michael Noonan announced last week that he planned to proceed with the sale of a 25 per cent stake in AIB to stock market investors in a deal expected to raise about €3 billion for the Government.

The transaction is expected to conclude at the end of this month.

Intermediaries list

Sources said that the move to expand the intermediaries list was taken so that clients of smaller brokerages would not be put at a disadvantage, rather than an active push by the Government to sell Europe’s largest initial public offering so far this year to members of the public.

“The allocation of shares to applications from members of the public will be decided on the basis of demand received and may be less than the amount applied for,” the department of finance said in an advertisement appearing across daily newspapers on Friday.

Potential investors should consult an independent professional advisor as to the suitability of investing in the AIB shares, it added.

Market observers expect retail investors to be allocated between 10 and 15 per cent of the stock on offer.

The use of intermediaries adheres to the approach taken by the State during the IPO of Aer Lingus in 2006 and is a significant difference from the 1999 flotation of Telecom Éireann, since renamed Eir, which was more actively marketed to small investors.

A detailed prospectus on AIB, containing financial information and potential risks, is expected to be published next week alongside a price range at which the shares are expected to sell.