Thursday 27 July 2017

AIB share price range narrows before flotation

As this newspaper reported yesterday, a share price of close to €4.40 is viewed as the most likely valuation, meaning the Government would reap €2.5bn. Stock photo
As this newspaper reported yesterday, a share price of close to €4.40 is viewed as the most likely valuation, meaning the Government would reap €2.5bn. Stock photo

Gretchen Freimann

After seven years of State ownership, the long-planned partial privatisation of AIB will conclude today following a second narrowing of the deal price range.

The Government looks set to sell a 25pc slice of the bank at a slight discount to its book value as it navigates a tightrope between taxpayer and investor expectations.

It is believed the level of demand from the general public is not as high as first expected, perhaps because they had to commit a minimum €10,000.

Deal

The deal was initially valued at an unusually wide range of €3.90-€4.90 per share, equating to a market capitalisation of €10.6bn to €13.3bn.

That price spread has been narrowed twice this week and has now been reduced to €4.30-€4.50 per share.

According to large institutional fund managers, a lower valuation is likely to underpin a positive market reception, and ensure future selldowns achieve higher valuations.

As this newspaper reported yesterday, a share price of close to €4.40 is viewed as the most likely valuation, meaning the Government would reap €3bn.

The offer to retail investors or ordinary buyers has now been closed and they have been allocated 10pc of shares which will be sold.

The offer to institutions will close at noon today and the flotation will go ahead at 8am tomorrow.

It marks the largest deal in Europe's IPO market so far this year and reinforces the scale and depth of Ireland's economic recovery.

Irish Independent

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