Goodbody chief vows no job cuts as Chinese investor circles
Broker and controlling investor in talks with unnamed party, managing director says
A deal to acquire Goodbody would provide the Chinese with a European Union-regulated entity. Photograph: Dara Mac Dónaill
Goodbody Stockbrokers’ managing director moved on Monday to reassure his 310 staff that there would be no job cuts or strategy change after it emerged the group has attracted a Chinese suitor in a deal that could be worth more than €100 million.
Roy Barrett, who has led Goodbody since 1996, confirmed in an email to staff on Monday that the company and its controlling investor, Kerry-based financial services group Fexco, are in talks with an unnamed party which is seeking to buy the securities and wealth management firm.
He said the nature of the discussions would not involve job losses or a change in the company’s strategy.
The Sunday Times reported over the weekend that a Chinese investment group is in advanced discussions to buy Goodbody. It came a day after The Irish Times reported that the Goodbody’s former parent, AIB, was among parties circling Investec Ireland as the industry, facing rising regulatory and compliance costs as well as the impact of Brexit, prepares for a fresh round of mergers and acquisitions.
A deal to acquire Goodbody, which has been the subject of regular takeover speculation in recent years, would provide the Chinese with a European Union-regulated entity.
Fexco, founded and led by executive chairman Brian McCarthy, acquired 75 per cent of Goodbody in January 2011, in a deal worth €24 million. Management and staff at Goodbody, which traces its roots to 1877, have since doubled their combined holding to 49 per cent under an incentive scheme tied to the original deal.
Spokesmen for Goodbody and Fexco declined to comment. Restructuring at Goodbody in 2016 saw the company cut some jobs and create a new investment banking unit to sit alongside its prized wealth and asset-management divisions.
Business links between Ireland and China have grown apace in the past six years, following a visit by the then vice-president of China, Xi Jinping, to Ireland in February 2012, just over a year before he became the country’s leader.
Former taoiseach Enda Kenny and President Michael D Higgins have since made official visits to China, while the country’s premier Li Keqiang, visited Ireland three years ago, within six months of his nation lifting a ban on Irish beef.
State-controlled Bank of China set up an Irish branch of its UK operation last year to capitalise on growing commercial links between both countries. Ireland is the second-biggest supplier of baby formula to the world’s most populous country and Bord Bia predicts that China will become the first billion-euro market for Irish food and drink exports outside of the UK by the end of the decade.
China General Nuclear Power’s European arm last year acquired 14 Irish wind farms for €400 million, while China moved in late 2016 to ease the way for Irish investors to access the country’s capital markets under its so-called Renminbi Qualified Foreign Institutional Investor Scheme.
In addition, Dublin-based aircraft leasing group Avolon was acquired two years ago by a unit of Chinese conglomerate HNA Group in a deal valued at $7.6 billion (€6.1 billion). HNA, which is financially stretched after $40 billion of deals in the past two years, is currently in the middle of a massive asset-sales drive to appease its own creditors.