Bank of Ireland shares drop 9% after Fairfax halves its stake

Shares in Bank of Ireland dropped 9% on Tuesday after Canada’s Fairfax Financial Holdings sold half of its 5.8% stake in the Irish lender, say press reports.

According to a report run by Reuters, Fairfax Financial plans to sell 2.9% of its stake, or 935 million of its shares, netting it a €266m profit on the basis of Bank of Ireland's closing price on Monday.

Fairfax, a Canadian property and casualty insurer run by investor Prem Watsa bought an 8.7% stake in 2011 as part of a consortium including US billionaire Wilbur Ross when the shares were trading at 10 euro cents, and cut that to 5.8% last March.

The 2011 consortium bought a total 35% stake in the months after Ireland signed up to and European Union and IMF bailout in a deal that kept the bank out of state control.

Deutsche Bank will place the shares with investors for Fairfax.