BILLIONAIRE INVESTOR PREM Watsa, often called the ‘Canadian Warren Buffett’, has made a massive gain of more than half a billion euro on Bank of Ireland shares bought after the crash.
Watsa’s investment vehicle, Fairfax Financial Holdings, said in its recently published annual report that it has sold the vast majority of its holding in the Irish bank at a large profit.
Fairfax was one of a group of five investors that acquired a 35% stake in Bank of Ireland in 2011 for the knock-down price of €1.1 billion when shares were trading at 10c.
This helped to save the bank from being fully nationalised. Bank of Ireland was also kept afloat by the state, which sank €4.8 billion into the organisation between 2009 and 2011. Bank of Ireland later repaid €6 billion to the state.
The group of investors also included billionaire businessman Wilbur Ross, who is now Donald Trump’s commerce secretary. Ross was estimated to have originally invested €290 million for a 9.9% stake and made a profit of about €500 million selling the shares.
Watsa’s Fairfax has now revealed that it likely did even better than Ross.
In its annual report it said: “We purchased 2.8 billion shares of Bank of Ireland stock in late 2011 at 10 euro cents per share.
“As of today, we have sold 85% of our position at 32 euro cents per share, for a total realized and unrealized gain of approximately $806 million (€560 million).”
Fairfax also hailed the performance of Bank of Ireland CEO Richie Boucher, who recently announced his plans to step down as head of the organisation.
“Richie has produced outstanding results for us and we are fortunate that he consented to join the board of (Greek lender) Eurobank,” it said.
Similar to Ross, Watsa’s Fairfax began to sell its Bank of Ireland shares after the organisation returned to profitability in early 2014.
Since then, it has continued to sell down its stake for prices as high as 36c per share in 2015. Bank of Ireland shares are currently trading at 24c.