Monday 23 April 2018

Investors sceptical on AIB valuation

Allied Irish Bank’s valuation may reach €13bn as the government sells down a quarter stake in the nationalised lender in a long-awaited initial public offering. (stock photo)
Allied Irish Bank’s valuation may reach €13bn as the government sells down a quarter stake in the nationalised lender in a long-awaited initial public offering. (stock photo)

Gretchen Friemann

AIB management will hit the road for the last time next Wednesday as they approach the final furlong on the nationalised lender's near €3bn initial public offering.

Bullish analysts have pencilled in a valuation of €13bn, but some potential investors insist that figure is overblown.

A number of hedge funds claim €11bn to €12bn is more likely, based on a €2.5bn float priced at €4.50 per share.

The prospectus to the float, tipped to rank as Europe's largest this year, is expected to be launched on the same day, June 14.

While AIB's top-ranking executives have worn out the shoe leather over the past few months, these last meetings with prospective stakeholders are crucial and will shape the bank's ultimate valuation.

US fund manager BlackRock is likely to number among the chief targets. Last week the heavyweight investor became the biggest stakeholder, aside from the Irish taxpayer, in Bank of Ireland. The firm also owns the largest number of shares in CRH and Kerry Group.

BlackRock's exposure to Bank of Ireland - held across a number of different funds - has now reached 6.6pc, according to data compiled by Bloomberg.

News of the move up the register comes as the Department of Finance attempts to cement appetite for AIB ahead of its sale of a 25pc in the revitalised bank.

As the Irish Independent highlighted last week, much of the focus from prospective investors hinges on forecast dividend growth, with payouts expected to top €500m by 2019.

Those figures however are contingent upon approval from the regulator.

Irish Independent

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