FBD Holdings has agreed to sell its 50% stake in the hotels and leisure business (FBDPLL) to its partner and largest shareholder Farmer Business Developments. Farmer Business Developments, the original founder of the insurance company, still holds 24.6% of FBD.

The total cash consideration of the proposed deal is €48.5m, which will be used to further boost FBD capital reserves as it prepares for Solvency II.

This will be put to FBD shareholders in the coming weeks. However, as the deal is a related party transaction, Developments will be not allowed to vote. Developments holds 28.7% of the voting rights in FBD.

The proposed deal will also be put to the shareholders of Farmer Business Developments.

FBDPLL owns and manages Irish and Spanish property and leisure operations including La Cala and Sunset Beach Resort in Spain and three hotels in Ireland: Castleknock, Faithlegg and the Tower Hotel, Waterford.

The carrying value of FBD’s interest in FBDPLL at year end was €47.2m. Last year the FBD share of the profits in the JV amounted to €1.9m.

The board has said that this proposed transaction has “clear strategic and financial rationale” as the group focuses its strategy on its core insurance underwriting business.

FBD confirms it is to sell hotels business for €48.5m

FBD is to sell its hotels and leisure business to its parent and largest shareholder Farmer Business Developments.