‘No evidence’ Bawag’s €1.6bn PTSB offer is ‘bad deal for shareholders’, court told

There is “simply no evidence” to suggest the proposed €1.6 billion bid from Austrian lender Bawag to acquire PTSB “is a bad deal for shareholders”, the High Court has heard, and it remains the “only price on offer” despite “musing and mutters” otherwise.

Then minister for finance Brian Lenihan Jnr, when buying 99.2 per cent of PTSB shares in 2011, did so “not for some opportunistic commercial venture”, but “to come to the aid of a flailing bank during a time of financial crisis,” Lyndon MacCann, counsel for Minister for Finance Simon Harris, told Judge Michael Quinn Friday.

The proposed takeover of PTSB by Bawag is subject to High Court approval, with proceedings this week dominated by objections from four minority shareholders who, collectively, own 0.00287 per cent of the bank.

They allege the acquisition should not be sanctioned as, among other things, the Minister benefits from “special, incredible” rights not enjoyed by other shareholders, which led to unequal access to information during the bid’s consultation process.

However, to argue this “involved turning logic on its head”, MacCann told the court.

Piotr Skocylas, a litigating shareholder who has addressed the court for the past four days, briefly questioned the constitutionality of the Minister’s holding PTSB shares on Thursday. He has repeatedly lamented the way in which he acquired his current 57.5 per cent stake.

Shareholders have acquired their stake in the company through various different means, he said, with some buying, inheriting or being given their shares at various different prices.

“Irrespective of how we got here, we got here lawfully,” MacCann said.

He added that Skocylas “has not put any evidence before that court that the scheme is a bad deal for shareholders”.

“All he has put before the court is photocopies of two reports”, he continued, citing an S&P newsletter and Business Post article, which quote financial analysts’ opinions on the acquisition offer.

“They are entitled to their view, but this is not evidence that an intelligent or honest member of the class could not have reasonably voted in favour of the scheme”, MacCann said, citing the legal threshold for the scheme to be approved.

Meanwhile, Axis Capital “is not within a country mile” of preparing a tangible counter offer, MacCann continued, despite “mutterings and musings” otherwise from the advisory firm cofounded by Mark Duffy, the former chief executive of Bank of Scotland Ireland.

Last Thursday, the firm said it would seek an adjournment of this week’s High Court proceedings of up to six weeks in order to allow time for it to prepare a rival bid. The court heard Wednesday Axis could offer €3.20 per share by way of a bid supported by “one of the most esteemed investment banks in the world”.

Kelley Smith SC, counsel for PTSB, told the court Axis “lacks the resources to actually implement an offer” and “has no track record of M&A [merger and acquisition] transactions”.