IFG takes option on share repurchase

Financial services group, IFG, has exercised its option to repurchase the three million IFG shares it sold to Abbey National plc in 1995.

IFG sold the shares at 32p sterling per share and has now purchased them back at 42p sterling per share. Abbey National purchased the shares through a subsidiary, First National Leisure Services, at double the then market price. It will show a capital profit of 10p per share. The share deal, and the option, were part of IFG's arrangement to acquire First National Trust company. IFG noted it effectively put a cap on the ultimate cash price paid for First National Trust while putting IFG in a position to make the acquisition in the first place. With IFG shares at #1 (79p) on the Irish exchange yesterday, it was in the company's interests to exercise the option. The shareholding, representing 6.79 per cent of IFG's equity, will be held as treasury shares. The deal is earnings enhancing and IFG reckons it will boost earnings per share by some 7 per cent.