Bank Of Ireland To De-list From NYSE In February

The Bank of Ireland IRE announced recently that it will be terminating its American ADR program and that the company will no longer be listed on the New York Stock Exchange (NYSE). In a press release on Jan 21, the company explained that the ADR program is no longer consistent with the goals of the company.
Bank of Ireland’s rocky road
During the financial crisis, Bank of Ireland received a 4.7 billion euro bailout from the Irish government so that the bank would remain solvent. The company’s share price took a huge hit, and dropped to 0.12 euro per share on the London Stock Exchange and Irish Stock Exchange, the company’s two primary stock listings. This price represented a 99 percent drop from 2007 highs.
Return to profitability
In July, Bank of Ireland reported its first profits since 2008. The Irish government has now redeemed the preferred shares it held in the company and appears to be content with holding its remaining 14 percent stake in Bank of Ireland for the time being. The company’s ADR share price has more than doubled over the past two years.
Reasons for the de-listing
Bank of Ireland’s press release last week explained that ADRs make up less than five percent of the company’s outstanding shares and that continuing the ADR program would be inconsistent with the company’s current investor relations strategy. In its press release, the company stated, “The Group has concluded that the benefits of reduced administrative complexity exceed those of continuing the programme.”
Share price reaction
Shares of Bank of Ireland’s ADR traded down more than eight percent on Friday after the news and ARE now trading around $12.67 per share. The majority of the downward move was likely due to the fact that the ADR had been trading at a premium to the company’s European-listed stock, which recetly traded at 0.281 euro. That price implies a value of $12.77 per ADR share, each of which represents 40 shares of the primary stock.
The company’s press release states that the de-listing from the NYSE is expected to come on February 12.
Disclosure: the author owns shares of Bank of Ireland.