March 4, 2014 / 2:07 PM / 4 years ago

UPDATE 3-Bank of Ireland investors triple their money in stake sale

* Pair invested when shares had fallen to 10 cents

* 6.4 pct stake offloaded at 0.328 euros per share

* Fairfax’s Watsa says no plans to sell more stock

* Govt says strategy remains unchanged on 14 pct stake

By Padraic Halpin and Laura Noonan

DUBLIN/LONDON, March 4 (Reuters) - Two of Bank of Ireland’s largest shareholders, who helped keep it out of state hands at the height of the euro zone debt crisis in 2011, more than tripled their money when they sold part of their stake on Tuesday.

Wilbur Ross and Fairfax Financial sold a combined 6.4 percent stake at just below 0.33 euros per share.

Billionaire investor Ross and Fairfax boss Prem Watsa, who owned almost 18 percent of the bank before the sale, were among a group of North American investors who bought a 35 percent stake only months after Ireland signed up to an EU/IMF bailout.

Fairfax said it did not plan any further reduction to its stake in the country’s biggest lender, while Ross could not be reached for immediate comment.

The price represents a hefty increase on the 10 cents the group of investors, which also included Kennedy Wilson, the Capital Group and Fidelity Investments, paid for their holding.

“Bank of Ireland has been one of our most successful investments,” Watsa told Reuters in an interview.

“Because of the significant appreciation, we are rebalancing our position. The position had become very significant (in terms of our overall portfolio).”

“We remain strong supporters of (chief executive) Richie Boucher and Bank of Ireland... Bank of Ireland will benefit from the ongoing recovery of Ireland and we have no intention to sell any more of our stake. We are long term investors.”

Ross owned more than 2.9 billion Bank of Ireland shares, or 9.1 percent of the bank, before Tuesday’s announcement. Fairfax held 2.8 billion shares, or 8.7 percent.


Bank of Ireland shares fell 7 percent on Monday after its full-year results, having risen by 25 percent to a high of 0.39 euros in the month before publication. Shares were down 9.4 percent at 0.33 euros by 1530 GMT on Tuesday.

The 14-percent state-owned bank said it returned to profit in the first two months of the year and cut its full-year loss by almost two thirds in 2013 thanks to improved margins and a fall in the number of homeowners in arrears.

Fairfax has since gone on to invest in Greece, announcing an increase in its stake in property company Eurobank Properties in October, while Ross told Reuters last year that he was keen on financial assets in Spain, another distressed euro zone market.

Deutsche Bank, the placing’s bookrunner, said 2.1 billion euros of shares were sold to institutional investors only and that Ross and Fairfax had agreed not to sell any more shares for 90 days.

Ireland’s Davy Stockbrokers were also involved in the placing.

The pair were the second and third-largest shareholders in the bank behind the government, which also holds more than 99 percent of rival lenders Allied Irish Banks and permanent tsb.

Ireland’s Finance Minister Michael Noonan told Reuters in December that while the government had no interest in running banks in the long term, it was under no financial or political pressure to sell.

“I’d be surprised to see the government announce imminent plans to divest its residual Bank of Ireland equity stake,” Merrion Stockbrokers analyst Ciaran Callaghan said.

“Given the (state‘s) strong cash buffers, the state is not under any pressure to monetise its investment. I would expect them to weigh up the market’s reaction to the North American disposal before forming any concrete plans.”

A spokesman for the finance ministry on Tuesday said that its strategy remained unchanged and the government would reduce its shareholdings in the banks at the right time.

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