PTSB secured backing from 91.3 per cent of shareholders for its takeover by Austria’s Bawag at an extraordinary general meeting (EGM) on Thursday, despite the deal facing criticism from some small investors at the gathering.
Uncertainty remains nevertheless over whether a separate count of minority shareholders will be required to approve the deal after the Government’s majority stake drove the overall result. Some 36 per cent of minority investors voted against the transaction at the egm.
The €1.62 billion takeover needed support from at least 75 per cent of shareholders who voted to go through as a so-called scheme of arrangement overseen by the High Court. The Government owns 57.5 per cent of the bank, following its crisis-era bailout.
The High Court said in May that it could decide at a later date whether a separate count of minority shareholders was needed, after it rejected a petition from three small investors – led by long-time dissident shareholder Piotr Skoczylas – to have this established before the EGM.
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The €2.97-a-share deal was approved by 64 per cent of minority investors, short of the 75 per cent that would have been required had they voted as a separate class.
PTSB chief executive Eamonn Crowley said the bank has “very strong” legal advice that only one vote is necessary. The bank said it expects a High Court to hold a hearing to rubber stamp the process in the final three months of the year.
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The European Central Bank (ECB) and Central Bank of Ireland will need to approve the deal before such a hearing.
Executives said they were open to the court clarifying before a sanctioning hearing whether a second count of minorities will be needed. If one is required, it is understood it would result in a fresh vote by minorities, rather than relying on how they voted at the egm on Thursday.
Thursday’s shareholder meeting lasted about 50 minutes and heard from a handful of small shareholders, three of whom criticised the planned sale.
David Shields, who travelled from Switzerland for the meeting, said he was “very unhappy” about the price of the deal – which equated to about a 20 per cent discount to the balance sheet value of PTSB’s assets.
“You’re giving the company away,” he said.
[ PTSB investors urged by advisory firm to reject €1.62bn saleOpens in new window ]
Two others complained about the fact that PTSB is being purchased by an overseas company.
PTSB chairwoman Julie O’Neill said the sale had been run as “an extensive and well-governed public” process and that the offer on the table “is the highest deliverable offer and one we believe represents excellent value for all shareholders”.
“We did not decide to recommend an offer like this lightly,” she said.
O’Neill also revealed that the bank had been concerned through late 2024 and 2025 that it would attract “an opportunistic bid that undervalued” it, and had developed a defence strategy against such an approach, before deciding to put itself up for sale in October.
Austria’s fourth-largest bank by assets, Bawag, which owns Irish mortgage start-up Moco, was hotly tipped as a likely suitor by analysts and industry commentators from the moment PTSB put itself up for sale.
While the agreed €2.97-a-share takeover price was 9.5 per cent off the stock’s peak in early March, it marked a 26 per cent premium to where the stock was changing hands before the sale process was announced.
Bawag has jumped as much as 66 per cent over the same period, making it one of the top performing European banking stocks, driven by analysts and investors concluding that the group has secured a great deal.
The Vienna-based bank said last week that it had accumulated more than €1 billion of excess capital, more than enough to self-fund the acquisition of PTSB. It said it remained “incredibly excited” about the opportunity.
The remainder of the €1.62 billion cost of the acquisition will come from PTSB itself. This includes the Irish bank’s surplus capital and the ability of Bawag to book an immediate profit from the deal, because it was priced at a 20 per cent discount to the balance sheet value of PTSB’s assets.
Bawag chief executive Anas Abuzaakouk said in April the group did not currently plan to make “any material changes” to PTSB’s 98-strong branch network. But it is widely expected to reduce the size of its 3,000-strong workforce to cut running expenses at a bank whose cost-to-income ratio was 71 per cent for the first half of the year, more than double the 31 per cent Bawag reported in its second quarter.
The other two Irish retail banks have ratios below 50 per cent.
The Austrian group has also said it plans to carry out a “detailed review” of product lines it has on offer in Austria, Germany and the Netherlands, with a view to rolling them out in Ireland.
This will include household energy-efficiency loans, small-business and self-employed banking products, investment brokerage services and financing of residential and commercial property development and investment.
