Rival suitor argues Irish control of Permanent TSB, polls investors

A potential suitor of Permanent TSB Group Holdings PLC made a case for its ownership of the Irish lender and questioned shareholders to gauge their interest in a rival offer.

Earlier this month, Axis Capital, a Dublin-based advisory firm, said that it was considering making a cash offer priced at EUR3.20 per share. Based on Permanent TSB's 545.0 million issued shares, that offer would be worth EUR1.74 billion in total.

This is 7.7% higher than the offer of EUR2.97 per share from Vienna-based lender BAWAG Group AG, a subsidiary of BAWAG PSK, which values Permanent TSB at EUR1.62 billion.

BAWAG and Permanent TSB had agreed to the terms of the takeover in April, and shareholders approved the transaction at a general meeting in July. A court sanction hearing is scheduled on October 27.

Permanent TSB shares fell 3.7% to EUR2.89 each for a market capitalisation of EUR1.67 billion. The stock is up 31% over the past year.

So far, Permanent TSB dismissed the approach from Axis as "speculative", and has said the same about another expression of interest, made on Friday by London-based investment firm Scotchstone Capital LLP.

For its part, Axis has already stressed that it "treats PTSB as an Irish platform to build on, not an asset to fold into a foreign group".

On Monday, Axis provided further details of its plan for the bank, should it end up as the buyer.

"Our ambition is straightforward: a third force, not a third place. We want to build on PTSB as a durable challenger to AIB and Bank of Ireland."

According to Axis, this was what the Irish state had in mind when it "kept PTSB alive in the global financial crises".

The Irish government once owned 99% of Permanent TSB, when it bought shares during the financial crisis. State ownership has since been reduced to 57% of Permanent TSB, which put itself up for sale in October last year.

"The test should be more than the headline sale price: will PTSB become a stronger challenger to AIB and Bank of Ireland? It would be odd if, in such a strong economy, Ireland ended up with fewer effective banking competitors when the ambition should be more competition, not less," Axis argued.

Under its ownership, Permanent TSB would have "Irish headquarters, an Irish board and Irish decision-making, backed by local minority shareholders", Axis said.

It plans to expand the mortgage and consumer banking arm of the business, with a larger platform for agri-banking and small-to-mid-sized enterprises. It also aims to book more income from insurance, pensions and payments.

Further, it plans to "work with fintechs rather than copy them" and maintain a disciplined approach, with "no dependence on aggressive synergies".

Axis also stressed that, if it were to close branches, it would never intend to "leave an area without cash services or another form of PTSB presence".

The suitor has invited Permanent TSB shareholders to express their views anonymously, through a form in which they indicate whether they would be interested in a rollover scheme, and if so, what portion of their shares they intend to roll over.

Axis is also asking about general sentiment towards its possible offer, as opposed to the BAWAG buyout.

The responses from shareholders do not constitute binding commitments, Axis said. Neither it, nor Scotchstone, has made a firm offer to Permanent TSB.

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