€1.6bn Bawag bid for PTSB faces court scrutiny

The High Court in Dublin heard on Friday that there is no evidence the €1.6 billion proposal from Austrian lender Bawag to acquire the Postal and Telecommunications Services Board, or PTSB, is disadvantageous to shareholders. Lyndon MacCann, counsel for Minister for Finance Simon Harris, stated that the bid remains the only price on the table despite ongoing discussions about alternatives.

MacCann addressed Judge Michael Quinn, noting that the former Finance Minister Brian Lenihan Jnr purchased 99.2 percent of PTSB shares in 2011 to assist a struggling bank during a financial crisis rather than for opportunistic commercial gain. The proposed takeover requires court approval, a process currently challenged by four minority shareholders who collectively hold 0.00287 percent of the bank.

The objecting shareholders argue the acquisition should not be sanctioned because the Finance Minister possesses special rights that other shareholders do not enjoy. They claim this led to unequal access to information during the bid consultation. MacCann countered that this argument turns logic on its head, emphasizing that the current shareholding structure was established lawfully through various means including purchase, inheritance, and gifting.

Piotr Skocylas, one of the litigating shareholders who has addressed the court for four days, questioned the constitutionality of the Minister’s shareholdings on Thursday. He holds a 57.5 percent stake in the company. MacCann responded that Skocylas had not presented concrete evidence that the scheme is a bad deal, citing only photocopies of an S&P newsletter and a Business Post article quoting financial analyst opinions.

MacCann noted that while analysts are entitled to their views, this does not meet the legal threshold for approval, which requires that an intelligent or honest member of the shareholder class could reasonably vote in favor of the scheme. He also addressed claims from Axis Capital, a firm cofounded by former Bank of Scotland Ireland chief executive Mark Duffy, which has suggested it might prepare a rival bid.

MacCann stated that Axis Capital is far from preparing a tangible counter offer. On Thursday, the firm requested an adjournment of up to six weeks to allow time to finalize a bid. On Wednesday, the court heard that Axis could offer €3.20 per share, supported by a major investment bank. However, Kelley Smith SC, counsel for PTSB, told the court that Axis lacks the resources to implement an offer and has no track record in merger and acquisition transactions.

The court continues to review the objections as the legal process moves toward a decision on the Bawag acquisition.