The Government has decided not to go ahead with the sale of the EBS Building Society to a consortium led by Dublin-based investment group Cardinal Capital.
A statement from the National Treasury Management Agency said the sale process had been ended after a decision by Finance Minister Michael Noonan.
The NTMA said that, having evaluated the proposal at length, it was decided that the bid was 'not sufficiently commercially attractive to the State to merit continuing
with the sale process'.
Cardinal, which was the preferred bidder, expressed 'extreme disappointment' at the outcome. As well Cardinal, the consortium also included the US-based Carlyle Group and US private equity group WL Ross & Co.
Cardinal said it had submitted a proposal to recapitalise the EBS and inject more than €600m into the institution, adding that its plan would have minimised the cost to the taxpayer.
Late last year, the Government injected €525m into the building society, which is in State control. The taxpayer had already invested €350m into the lender.
Nick Corcoran, a director of Cardinal Capital, told RTÉ News the consortium 'had international experience which was second to none'. He said he was disappointed that the EBS takeover talks had been terminated.
He added that he did not believe the State was in a position to do a transaction with international capital. Mr Corcoran added that the process had been 'incomplete and unsatisfactory'.
He said the Irish authorities were now coming round to the view that the losses faced by the banks would be in line with what the consortium had been predicting for some months. He added that he would be happy to offer the State the benefit of the analysis work undertaken by the consortium.
