Lender Permanent TSB backs EU1.62 billion Bawag buyout
Permanent TSB Group Holdings PLC on Tuesday said it has agreed to a €1.62 billion takeover from Austria’s Bawag Group AG, after a ‘robust and competitive formal sale process’.
The Vienna-based bank will acquire Permanent TSB for €2.97 in cash, a 26% premium to the London-listed undisturbed share price of €2.35, before it put itself up for sale, back in October.
The offer values the lender’s entire issued share capital at €1.62 billion.
Shares in the company were up 0.7% to €2.95 in London on Tuesday morning, giving it a market capitalisation of €1.61 billion.
A dividend for 2025, if paid, will be in addition to the offer price.
‘The PTSB board believes that the acquisition is in the best interests of PTSB shareholders and represents the most effective route to enhance value for shareholders, relative to PTSB’s other strategic options which have been considered as part of the formal sale process,’ according to a statement on Tuesday.
Dublin-based Permanent TSB, which the Irish state has around a 57% stake in, put itself up for sale back in October.
Bawag confirmed its interest back last month.
‘We are thrilled to have been selected by PTSB to enter into this transaction. The trust and confidence placed in us by the PTSB board and the Minister, as the bank’s majority shareholder, is something we take very seriously,’ Bawag Chief Executive Officer Anas Abuzaakouk said.
‘Ireland represents a very attractive market for Bawag, underpinned by a strong macroeconomic backdrop, a robust banking sector, and solid long-term fundamentals. Building on our presence in Ireland since 2015 and the establishment of our retail business with MoCo in 2023, the proposed acquisition represents a highly strategic opportunity to strengthen our competitive positioning by bringing together PTSB’s local market expertise and commitment to community banking with the balance sheet strength, scale, and operational capabilities of Bawag Group. We are well positioned to drive competition through investment and innovation, supporting PTSB’s customers and, more broadly, the Irish economy, while delivering long term, sustainable growth.’
Permanent TSB Chair Julie O’Neill said the deal will ‘facilitate the exit of the state’s remaining shareholding’.
The Irish government once owned 99% of Permanent TSB, when it bought shares during the financial crisis.
‘Following a robust and competitive formal sale process, the PTSB board is pleased to confirm that it has agreed the terms of a transaction with Bawag. The PTSB board’s decision followed a thorough evaluation of value, certainty, stakeholder considerations and long-term strategic fit. We are confident Bawag brings the long-term ambition, capability and capital to accelerate PTSB’s growth and strengthen competition for customers in the Irish market,’ O’Neill said.
NatWest Group PLC in July sold its stake Permanent TSB, raising €126 million. It sold an 11.7% interest through an accelerated book building process. NatWest received an original 16.7% stake in Permanent TSB in late 2022 as part payment for Ulster Bank loans it sold to Permanent TSB. It then trimmed its stake in 2023.
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