ONE OF the three private equity firms to have expressed an interest in an investment in the State-controlled EBS Building Society is now being backed by investment giant, Carlyle Group.
Cardinal Asset Management, led by Dublin businessman Nigel McDermott and Nick Corcoran, were working on an investment with US buyout firm JC Flowers but they have since submitted separate expressions of interest. Cardinal is now backed from Carlyle.
It is understood the firm parted company with JC Flowers as they differed on the scale of the investment they were willing to make.
Carlyle is leading more leveraged buyouts globally this year than its rivals with 15 deals valued at $4.4 billion (€3.4 billion). It agreed a $3.8 billion deal this week to buy US nutritional supplements firm NBTY, its biggest transaction since 2007.
Four parties have expressed an interest in EBS – Irish Life Permanent and private equity firms, JC Flowers, Cardinal and London-based Doughty Hanson.
Carlyle and JC Flowers were both in the Mallabraca consortium led by Cardinal which had eyed an investment in Bank of Ireland in 2008.
EBS requires €785 million to meet new capital rules after a €90 million debt buyback reduced the original target of €875 million.
The Government has injected €350 million – €100 million in cash and €250 million in promissory notes or IOUs – but EBS still has a shortfall of €435 million.
Minister for Finance Brian Lenihan said the Government estimate on the cost of the bank clean-up at up to €25 billion didn’t include the EBS injection. He said he didn’t expect the same return from EBS as he expects from AIB and Bank of Ireland.
“The EBS has not been characterised as a failed institution as Anglo and Nationwide have been. While that is the case, it is only fair to say that we do not anticipate the same level of commercial return on our investment,” he said
Asked whether private investors would not expect the same return, Mr Lenihan said there were many reasons why investors would want to acquire a particular institution.
The National Treasury Management Agency was assessing the Government’s options and the process would be finalised in August, he said. Cardinal is keen on investing jointly with the State.
