An international shareholder advisory firm has come out against PTSB’s planned €1.62 billion sale to Austria’s Bawag, saying the bid looks “increasingly tenuous” amid opposition from some shareholders and a surge by European bank stocks since the lender was put up for sale. Glass Lewis, the second-most-influential player in the proxy adviser sector, noted that PTSB shares have breached the €2.97 offer price agreed in April and which faces a crucial extraordinary general meeting vote on July 30th. The stock reached €3.03 on Friday and continued to change hands – albeit at very low trading volumes – at that level on Monday. PTSB shares had at one stage reached €3.23 per share in early March, which “strongly suggests” investors anticipated “a more attractive price” in the run-up to the sale announcement, Glass Lewis said. The Government, with a 57.5 per cent stake, has committed to backing the Bawag deal. “There does not appear to be sufficiently compelling cause for investor support at this time,” said Glass Lewis. Its call contrasts with a recommendation from Institutional Shareholder Services (ISS), the leading international proxy advisory firm. ISS issued a note earlier this month to clients, saying investors should vote in favour of the transaction, and adding it would be hard to argue it could have achieved much more, even though the price was “understandably disappointing”.PTSB and its advisers are understood to be confident the resolutions will win the 75 per cent shareholder approval required. But share trading above the offer price suggests some investors see other possibilities, according to market sources.[ PTSB chief defends bid remarks after Dáil claims of ‘misleading’ investorsOpens in new window ]They said the premium could reflect expectations that Bawag may yet be persuaded to increase its bid, that a rival bidder could emerge or that PTSB’s shares should be trading at current levels regardless, given a strong rally in European banking stocks has continued since the deal was struck three months ago. Glass Lewis noted that the Iseq 20 index rose more than 16 per cent between October 29th, the day before PTSB announced it was on the market, and the close of trading on Friday. The Euro Stoxx Banks Index has jumped 27 per cent over the same period. The firm noted that businessman Eamon Waters’s Sretaw investment vehicle, the owner of about 7.2 per cent, had expressed disappointment with the proposed terms. But while Sretaw had come out in March against an indicative offer from Bawag that was about four cent off the final deal, it has not commented on the actual agreement. Samson Rock Capital, owner of about 3.1 per cent of the bank, has reportedly been encouraging other PTSB investors to reject the sale.PTSB “firmly disagrees” with Glass Lewis’s conclusion, a bank spokeswoman said. “PTSB’s formal sale process involved an extensive global outreach to a wide range of potential buyers, including financial institutions, strategic investors and financial sponsors. This process was open to all interested parties.“PTSB is firmly of the view that the Bawag proposal represents the best value for all shareholders.” Glass Lewis said PTSB’s management, led by chief executive Eamonn Crowley, has been upbeat about the bank’s prospects, saying in the offer announcement that it was “well positioned to continue delivering sustainable commercial and profitable growth”, had launched a refreshed business strategy in March and was benefiting from a favourable domestic economic backdrop. The firm noted that the consensus price target on the stock by analysts was €3.23 before the deal was announced. While Glass Lewis said a rejection of the proposed sale “may give way to an indeterminate market environment, potentially including volatile trading patterns and regression in PTSB’s value”, it highlighted the strong run by banking stocks in general in recent times. Glass Lewis acknowledged the sale process “appears to have been reasonably structured and engineered to drive competitive tension among those parties seen as offering credible bids for the company”.