Dublin raises 104m pounds from sale of half Irish Life stake: Interest from foreign institutions 'reflects confidence'

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The Independent Online
ENCOURAGED by the resurgence of the Dublin stock market, the Irish government yesterday made Ir pounds 104m ( pounds 104m) from the sale of half of its remaining 34 per cent stake in Irish Life, the largely privatised insurance group.

Bertie Ahern, the finance minister, said the state had got a very good deal by placing the shares at a small discount on Thursday's 200p closing price.

Of the 50 institutional buyers, 20 were from outside Ireland.

David Kingston, the Irish Life chairman, said the foreign interest reflected confidence in the company and would bring in useful capital. Irish Life shares traded in Dublin yesterday at 195p.

By selling 55 million of the 110 million-share stake, Mr Ahern has secured two-thirds of his Ir pounds 150m target from privatisation sales needed to finance 1993's spending, set in February's budget. A 26 per cent rise in the Dublin stock market this year helped lift the Irish Life sale price above the 177p a share level of a few weeks ago, when the placing got under way.

Asked if more might have been obtained for the Irish Life shares by waiting, Mr Ahern replied: 'It could have been far less,' stressing that the decision on the date of the sale was guided by the company's stockbroker, Davy's, and the government's adviser, National and City Brokers. Holding on to the whole stake might have deflated the future market price, he said.

John Hogan of the Dublin brokers Riada agreed, saying conditions for the sale would not have improved much. Investors had been attracted by a 6 per cent dividend yield compared with 4.5 per cent from the main Irish banks. Recent interest rate cuts following January's devaluation had also improved confidence in the Irish economic outlook.