With more than 99 percent of the vote, shareholders of Allied Irish Banks PLC approved early yesterday the sale of the bank's scandal-scarred Allfirst Financial Inc. subsidiary to M&T; Bank Corp., of Buffalo, N.Y., AIB said.
The Dublin banking company is selling its Baltimore subsidiary for $3.1 billion in cash and stock.
"We obviously felt - and continue to feel - this was an excellent deal," Catherine Burke, AIB's head of corporate relations, said in a telephone interview from Dublin. "We felt M&T; was the ideal partner, and we very much wanted to stay in the United States."
Burke said yesterday's meeting at AIB's Bankcentre headquarters was attended by roughly 60 people, since most shareholders voted by proxy.
Once M&T;'s purchase of Allfirst is completed - expected by April - AIB will retain a 22.5 percent stake in the merged company.
AIB's 22.5 percent stake in M&T; means the Irish banking company will eclipse Berkshire Hathaway as the Buffalo bank's largest stakeholder. Berkshire Hathaway has a 5.7 percent share in M&T; and is the investment vehicle for billionaire Warren E. Buffett.
M&T; will become the nation's 18th-largest bank, with $49 billion in assets and more than 700 branches in six states and the District of Columbia. It's now about the 26th-largest U.S. bank.
M&T; shareholders approved the Allfirst deal Monday at a stockholders meeting in Buffalo.
The merger calls for M&T; to issue 26.7 million shares of its stock to AIB and to also pay that bank $886 million in cash, which brings the deal's value to about $3.1 billion. The deal should close by the end of the first quarter next year, the banks said.
M&T;'s shares lost 38 cents yesterday to close at $79.07 on the New York Stock Exchange. Allied Irish shares closed down 25 cents, or 2 percent, to 12.60 euros in Dublin.
Allfirst became the focus of a currency trading scandal in February when bank currency trader John M. Rusnak was discovered to have made a series of unauthorized, money-losing trades that eventually reached $691.2 million.
Rusnak pleaded guilty in October to one count of bank fraud that calls for him to serve 7 1/2 years in prison. He awaits formal sentencing next month.
Reacting to the news of the shareholder vote in Dublin, M&T; spokesman C. Michael Zabel said, "We are very pleased. We remain on track ... with the integration of the two organizations."