Allied Irish Banks (AIB), the lender being taken over the Irish government, will raise roughly $2 billion by selling its 22.4% stake in M&T Bank Corp (MTB).
The Dublin-based bank will offer 26.7 million notes for a price of $77.50 each, Bloomberg News said. The notes will be exchanged for shares in M&T by Nov. 15.
The bank will put the plan to shareholders at a meeting on Nov. 1.
AIB is selling the stake in order to raise capital. Regulators have ordered the bank to raise 10.4 billion euros ($14.6 billion) to meet new capital requirements.
The Irish government said last week it would take a majority stake in AIB. Irish banks including AIB and Anglo-Irish Bank are still struggling with bad loans made during the country's real estate boom.