Goodbody wins Chinese business before takeover

Goodbody Stockbrokers last week won a first piece of business from its would-be new parent, Bank of China, as both sides wait for regulators in Beijing to approve the takeover.

The Irish firm was hired alongside a host of international banks, including Barclays, Citigroup, Bank of America Merrill Lynch and Standard Chartered, to sell $1 billion (€890 million) of bonds for Bank of China's Hong Kong branch last week.

Inclusion on the deal is being seen as a clear sign of the state-owned Chinese bank’s commitment to the €155 million takeover of Goodbody, even though a delay in approval of the transaction by local regulators is likely to seek the completion of the deal drift beyond a targeted timeline of the end of June, according to sources.

The bond deal was the first Asian capital markets deal in which Goodbody has been involved.

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Goodbody managing director Roy Barrett told staff in a briefing earlier this month that the finalisation of the Bank of China deal was taking a bit longer than expected. He dismissed speculation that the deal might not proceed, saying there were decent levels of engagement between both sides and that there has been no effort by the Chinese to renegotiate the terms of the deal, despite the economic turmoil caused by Covid-19 since the transaction was agreed last November.

Takeover

The Central Bank of Ireland approved the takeover in March. It would see Kerry-based financial services group Fexco sell its 51 per cent stake in Goodbody to Bank of China.

Management and staff at Goodbody own 49 per cent of the business and will get half of their consideration when the transaction is completed, with the remainder due within three years.

A deal struck in 2018 for a Chinese consortium, led by Zhong Ze Culture Investment Holdings, to take over Goodbody fell through early last year when the sellers became concerned about the changes to the make-up of the group following an initial agreement.

Davy, the largest securities firm in the State, and Irish Life were also on the shortlist of bidders circling Goodbody last year before Bank of China was selected.

Bank of China set up an Irish branch three years ago. The group also owns an aircraft leasing operation, BOC Aviation (Ireland), in Dublin.