UPDATE 1-Irish Life offers govt 10% stake for EBS bid-report

(Adds more detail, shares)

DUBLIN, Nov 3 (BestGrowthStock) – Irish Life & Permanent (IPM.I: ) has
offered to give the state a potential 10 percent stake in the
company in return for accepting an offer to merge its permanent
tsb banking arm with the EBS Building Society [EBSBS.UL], The
Irish Times newspaper said on Wednesday.

The company is offering the government warrants on a 10
percent stake in Irish Life & Permanent, which would give Dublin
a share in the upside value of the parent group if it were to
offload permanent tsb onto a merged bank with EBS, the newspaper
said, without citing sources.

No one from Irish Life & Permanent or EBS was immediately
available to comment.

The value of Irish Life is expected to rise if the company
sheds the loss-making and heavily indebted permanent tsb by
merging it with the building society.

Shares in the bancassurer were up nearly 0.7 percent at 1.47
euros in early trade on Wednesday, valuing the group at around
400 million euros ($561 million).

The other bidder for EBS, a private equity consortium led by
Dublin-based Cardinal Asset Management, has proposed taking full
control of the building society in return for injecting an
additional 500 million euros of capital required by the lender.

The financial regulator has said EBS needs 875 million euros
in additional capital by the end of year to cover large losses
on property loans and to meet tougher capital requirements.

The government has already committed 350 million euros and
has said it will stump up the remaining 525 million if EBS can’t
find a buyer for the business.

The Irish Times said under Irish Life & Permanent’s bid
proposal the government would inject the extra capital into EBS
and the state would end up with a stake of more than 40 percent
in the merged bank.

The government selected Irish Life & Permanent and Cardinal
Asset Management, which is receiving backing from the Carlyle
Group [CYL.UL] and U.S. investor Wilbur Ross, as final bidders
for EBS last month.

The Irish Times said that under Cardinal’s proposal the
government’s 350 million euro investment in EBS would be
converted into a debt instrument on which the state would be
paid a return as the building society returns to profitability.

Cardinal is also offering the state warrants to take a 10
percent stake in EBS, the newspaper said.

(Reporting by Carmel Crimmins; Editing by Michael Shields)

UPDATE 1-Irish Life offers govt 10% stake for EBS bid-report