Prem Watsa, Canada's answer to Warren Buffett, was in flying form as he addressed a luncheon in Toronto during the week.
There was plenty in the founder of Fairfax Financial’s address to 250 attendees to keep local hacks happy: Donald should quit Twitter; the US housing market is overvalued; he has structured his investment company in a way that his family can’t flog his 44 per cent stake after he’s gone.
But it was his comments about Bank of Ireland's outgoing boss, Richie Boucher, that caught Cantillon's attention. Watsa said that he and his pal, Wilbur Ross, Trump's 79-year-old commerce secretary, and three other North American investors would never had taken part in a €1.1 billion rescue investment in Bank of Ireland in 2011 had it not been for Boucher.
Indeed, he claimed that the five investors – who took on a 35 per cent stake in the bank at the time – were the ones who decided to keep Boucher on board even as top executives were removed across the rest of the Irish banking sector. And the reason why Bank of Ireland came through the other side, he said, was because Boucher remained in situ.
“Every bank went bankrupt,” Watsa said, relying on slight exaggeration to emphasise his point. “The only one that survived was Bank of Ireland, and that was on its way to going bankrupt. We, with three or four other investors saved it, but it was because of Richie.”
It’s little wonder Watsa is so effusive. Fairfax has made a CAN$806 million (€531 million) gain since the 2011 investment, having sold 85 per cent of its original 9.3 per cent stake, while its remaining shares are priced at 24c – almost 2½ times what Watsa stumped up for them six years’ ago.
We’ve yet to hear what Watsa makes of Boucher’s replacement, Francesca McDonagh, who was unveiled this week.
