Thursday 27 July 2017

Strong demand for AIB shares covers deal at the low end of its valuation range

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Gretchen Friemann

AIB's looming €2.6bn to €3.3bn initial public offering has attracted enough demand to price the deal at the low end of its valuation range, confirming the government will have little difficulty offloading a quarter slice in the nationalised lender.

A spokesperson on the deal, which will not be priced until later this month, confirmed the book was covered "within the range" but refused to specify the precise level of that demand.

However sources said there was sufficient demand at the bottom end of expectations.

The government is seeking to sell 679m shares, or a quarter slice of the bank, at a €3.90 and €4.90 per share. That equates to a market capitalisation of €10.6bn-€13.3bn.

While this represents a wide valuation range, the early indications of support, barely 24 hours after the books on the deal opened, indicate the pricing range is likely to narrow dramatically.

AIB's prospectus, published yesterday, stated shares in the partially nationalised lender will resume conditional trading on the London and Dublin stock exchanges on June 23.

An over-allotment option, or greenshoe, built into the deal means the government may sell up to 29pc of the bank.

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