The stock market showed its relief at the demise of the deal by sending Bank of Ireland shares sharply ahead. Fund managers and stockbrokers said the credibility of senior Bank of Ireland officials had been seriously undermined. The bank, they added, would have to show clearly that it had an alternative strategy. Bank of Ireland's group chief executive, Mr Maurice Keane, strongly defended the merger talks and insisted that the deal was well thought out and soundly based. In particular, the credibility of Mr Keane has come into question.
Inclusion ensures demand across the euro zone for the shares of the listed companies.
Bank of Ireland has refused to comment on the terms of the merger, but it is understood to have demanded a number of fundamental changes, including retaining the chief executive's position for Mr Keane, and altering the proposed 55-45 split more in Bank of Ireland's favour. It is also understood, however, that apart from the reservations of some non-executive directors, some senior Bank of Ireland management below board level had voiced their concerns about the merger, particularly about the installation of Mr White as chief executive. Analysts said the breakdown left both banks discredited and likely targets for takeover. Irish fund managers were divided on the likelihood of Bank of Ireland becoming a takeover target.