DUBLIN (Reuters) -AIB agreed on Thursday to proceed with a direct share buyback with the Irish state as its share price rose back above the agreed buyback price, allowing it to cut the government’s stake in the bank to 3.3% from just under 12%.
AIB announced the 1.2-billion-euro ($1.35 billion) buyback in early March at an agreed price of 6.26 euros a share but the plan was thrown into doubt when its share price fell as low as 5.16 euros on April 9 amid a global stock market rout unleashed by U.S. President Donald Trump’s tariffs.
AIB’s share price closed at 6.20 euros on Wednesday, up from 5.92 euros last Thursday when 97% of shareholders approved the proposal and AIB said its board would decide whether proceeding was in the bank’s best interests.
The shares rose a further 1.4% to 6.28 euros, above the buyback price, after the bank announced it would proceed. The buyback is expected to settle on Friday, the bank said.
Irish Finance Minister Paschal Donohoe said the government, now no longer the largest shareholder in AIB, had a clear path to exit the bank completely over the coming months by gradually selling down its remaining shares.
Ireland pumped 21 billion euros into AIB following a banking crash in 2010. Donohoe said the total return from its investment in AIB will reach 19.2 billion euros after the buyback with its remaining stake currently worth around 500 million euros.
AIB has also commenced preliminary discussions on buying back warrants the government owns in the bank, Donohoe added.
($1 = 0.8861 euros)
(Reporting by Padraic Halpin, Editing by Louise Heavens)
