Icelandic bank Landsbanki is understood to be examining Irish Nationwide's books, a move that brings it a step closer to bidding for the building society. Barry O'Halloranreports.
Landsbanki has had its eye on Irish Nationwide since legislation was passed this year allowing it to demutualise and seek a buyer.
At least three institutions have opened talks with the building society in recent weeks. Landsbanki has hired international institution HSBC to advise on a possible bid for the group.
Yesterday it emerged that the Icelandic institution had begun carrying out due diligence at Irish Nationwide, although it is understood that this is not being done on an exclusive basis and that the society is still talking to other potential buyers.
This month Landsbanki said it had a war-chest of between €350 million and €400 million to pay for acquisitions. Its joint chief executive, Sigurjon Arnason, said that Ireland was one of the markets on which it was focused.
Developments in Landsbanki's local market are said to have stepped up pressure on the bank to continue expanding. One of its Icelandic rivals, Kaputhing, recently announced that it was buying Dutch-based merchant bank NIBC for close to €3 billion. The Dutch institution is a mid-sized player in western European markets.
Irish Nationwide has 125,000 members, who are either borrowers or savers with the building society. According to recent estimates, they stand to make anything between €10,000 and €15,000 from its sale.
At its annual general meeting in Dublin three months ago, chairman Michael Walsh said it hoped to sell the institution by the end of the year. At that time he said the building society expected to begin the sale process as soon as possible.
As it is a mutual, members will get the final say on any sale. They will have to vote first to demutualise the society, and then to approve the sale itself. This process will require a general meeting.
Landsbanki already has a presence in the Republic through a 50 per cent stake in Merrion Stockbrokers, which it bought in 2005. It paid an initial €27 million for this holding. Under the terms of the deal it will have to pay over €100 million to acquire the rest of the brokerage if its performance this year and next matches that of 2006.
Landsbanki's other subsidiaries include Heritable Bank, Teather & Greenwood and stockbroker Bridgwell in Britain.
It also owns Kepler Equities, a stockbroker with offices in most of continental Europe's main financial centres. Landsbanki has tended to operate by allowing its subsidiaries to continue trading under their own brands and existing management.
The bank itself has branches in Iceland, Scandinavia and North America.
