Shareholder advisory firm backs PTSB sale to Bawag despite 'disappointing' price

An international shareholder advisory firm has urged investors in Irish bank PTSB to support its €1.62 billion sale to Austria's Bawag. The firm, International Shareholder Services (ISS), stated in a report that it would be difficult to argue that PTSB could have secured a significantly higher price, despite acknowledging that the sale price was "understandably disappointing."

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it would be hard to argue that there are potential bidders out there willing to pay a materially higher price.

ISS recommended that investors vote in favor of the sale at PTSB's upcoming extraordinary general meeting on July 30th. The firm noted that its recommendation was made "not without concern" because shareholders are not receiving a premium for Bawag's takeover. However, ISS warned that rejecting the transaction "brings additional risks for shareholders, with no clear upside."

The deal, struck in April, values PTSB at €2.97 per share. This represents an almost 20 percent discount to PTSB's reported end-2025 net assets, which stood at just under €2.02 billion. ISS pointed out that while PTSB's share price has not seen the same surge as competitors like AIB and Bank of Ireland, or Bawag itself, since the sale process began, it is realistic to expect PTSB's stock might have risen without a bid.

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The outcome of the process is understandably disappointing, as it doesn’t seem to account for a control premium.

The takeover is structured as a scheme of arrangement, requiring at least 75 percent shareholder support at the EGM. The Irish government, holding a 57.5 percent stake, has already committed to backing the deal. A recent court ruling struck out an attempt by a small group of minority shareholders to secure a separate vote, making it less likely for them to block the sale.

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brings additional risks for shareholders, with no clear upside