Anglo Irish Bank Plc, Ireland's third- largest, raised 542 million euros ($705 million) in a sale of new shares to finance lending in Ireland, the U.K. and U.S.
The company sold 35.7 million shares at 15.20 euros apiece, the Dublin-based bank said today in a statement. That's 2 percent below yesterday's closing price.
Chief Executive Officer David Drumm is focusing on business lending as the bank competes with larger rivals Bank of Ireland Plc and Allied Irish Banks Plc in Ireland, the fastest-growing economy in the euro region. Anglo Irish, which holds its annual shareholder meeting tomorrow, increased lending 25-fold in the last decade.
``The board is very confident of the bank's future,'' said Drumm, who took over two years ago. ``This new capital puts the bank in an excellent position to deliver strong growth and continue to generate superior shareholder returns well into the future.''
Anglo Irish also said it expects to meet analysts' estimates for earnings growth of 23 percent in the fiscal year through September 2007. Analysts estimate earnings will be 115.5 cents a share, Anglo said. That compares with 93.7 cents last year.
``We do not believe there are any imminent acquisition plans, and the capital is being raised to fund organic growth,'' Mark Thomas, an analyst at Keefe Bruyette & Woods Ltd. in London, wrote in a note to investors. Thomas is raising his 2008 earnings forecast 6.2 percent ``to reflect superior growth implied by this placement,'' he said.
Anglo Irish shares rose 19 cents, or 2.9 percent, to 15.96 euros as of 3:25 p.m. in Dublin. The stock has gained 23 percent in the last year, valuing the company at 11.5 billion euros.
While Anglo Irish ranks behind Bank of Ireland and Allied Irish in market value, it makes the most profit per employee by focusing on business lending. It has 20 offices and about 1,600 employees, while its two rivals each have hundreds of retail bank branches and more than 10 times the number of staff.
``Overall, Anglo Irish remains one of the best growth stories in the sector,'' John Cantwell and David Odlum, analysts at NCB Stockbrokers in Dublin, who have an add rating on the stock, wrote in a note to clients. ``Anglo's Irish business is set to remain a star performer while both the bank's U.S. and U.K. business are scalable, providing an excellent platform for growth.''
In September, the bank helped finance the acquisition of its U.S. head office in Boston for $170 million by Clarendon Properties, an Irish real-estate investment company.
Dublin-based Davy Stockbrokers, bought by management from Bank of Ireland Plc in November, managed the share sale.
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