Mark Talbot

Austrian bank BAWAG P.S.K. is proposing to acquire the entire issued share capital of Permanent TSB Group Holdings plc for €1.6 billion.

The recommended cash offer, which has been unanimously recommended by the PTSB board, implies a premium of 26 per cent to the undisturbed share price and 45 per cent to the undisturbed six-month volume weighted average share price.

At this price, the 57.5 per cent stake held by the minister for finance will result in around €931 million of proceeds for the State.

William Fry corporate partner Mark Talbot and senior associate Trish McGrath is advising the Department of Finance on the transaction.

The law firm has advised the Department of Finance on the return of the Irish banking sector to private ownership since 2015, including on the IPO and subsequent sell-down of the State’s 99 per cent shareholding in AIB Group and the sale of the State’s remaining shareholding in Bank of Ireland Group.

Tánaiste and finance minister Simon Harris said: “The announcement by PTSB and BAWAG represents the most significant development in the Irish retail banking market in over a decade.

“PTSB has made great progress in building a strong competitive franchise in the market and BAWAG’s demonstrated deep knowledge of the European and Irish banking sector can propel PTSB to an even more competitive position in the market, with the benefits of this to be seen by Irish consumers, businesses and the Irish economy more generally.

“The recommended cash offer by BAWAG presents the State with the opportunity to exit its last remaining shareholding in an Irish bank after 17 years and represents another major step towards the normalisation of the banking sector in Ireland.”

He added: “At a price of €2.97 per share the transaction will generate circa €931m for the State upon settlement. Through a combination of fees, dividend income, the bank levy and disposal proceeds the State has recovered circa €4.0bn from its investment in PTSB.

“On an overall basis, this means the State is circa €1.3bn above break-even on its €29.4 billion investment in AIB, Bank of Ireland and PTSB from direct shareholding linked income and has recovered a further circa €1.8bn from the banking sector since the introduction of the bank levy.”

Rothschild & Co is advising the Department of Finance on the financial aspects of the transaction.

A&L Goodbody is adviser to PTSB on the transaction.