PTSB share price was ‘of utmost importance’ in Minister’s decision on €1.6bn takeover offer

PTSB’s share price was “of utmost importance” to Minister for Finance Simon Harris when considering Austrian bank Bawag’s €1.6 billion offer for the Irish lender , a senior civil servant has told the High Court.

Desmond Carville, the head of the shareholding and financial advisory division at the Department of Finance, said today that it was “our primary driver to maximise value for the Irish taxpayer” when considering the State’s exit of its stake in Irish banks. sector.

He appeared as a witness on the second day of a High Court hearing to sanction the agreement between the Austrian and Irish financial institutions, which requires the court’s approval.

Piotr Skoczylas, the managing director of Scotchstone Capital, which owns a less than 1 per cent stake in PTSB , is one of three shareholders objecting to the deal. He told Judge Michael Quinn yesterday that Minister for Finance Simon Harris was “driven by the State’s commitment to exit the investment”, not by a desire to achieve the best price for shareholders.

Skoczylas asked Carville a series of questions on what formed “part of the minister’s overall assessment to support the Bawag’s recommended cash offer”.

These included commercial matters, such as the bank’s branch footprint and product offering, as well as the Minister’s views of Bawag’s approach to the deal, for example, meeting trade union representatives and safeguarding employment and pension benefits.

Carville said these issues were not the Tánaiste and Fine Gael leader’s primary considerations . “Price was the first and foremost consideration,” he said. “Other points are secondary points; they flow from the transaction.”

The State owns a 57.5 per cent stake in PTSB. In its programme for Government, the Coalition said its objective is to normalise, or exit, it stake in the Irish banking sector, which the State built up after bailing out the sector in the aftermath of the 2008 financial crisis.

“It was a consequence of the offer by Bawag [that] the proposed transaction afforded the minister the opportunity to exit his last remaining stake” in the bank, Carville said. “It was not a major part” of the Minister’s decision, he added, but “a small part of it”.

Carville trained as an accountant at KPMG in the 1990s and worked as corporate finance director at Davy for 15 years. He currently sits on the board of the European Investment Bank.

Closing his testimony, Carville said he has spent the past 13 years at assistant secretary level at the Department, where he reports to the secretary general.

“We have resisted pressure from banks to sell shares” at times when the price on offer was not optimal, he said, and “it has taken us 13 years” to get to a point of satisfaction with a PTSB takeover bid. “If price was not important to us, I would not have spent 13 years of my time working on this,” he said.

Skoczylas, who pre-empted the single line of questioning from barrister Lyndon MacCann, for the Minister for Finance, by providing details to the court of what is and is not allowed to be cross-examined, said Carville was conducting an “abuse of process” and was “making speeches” on the stand.