Tuesday 21 January 2020

AIB investors told to bid above floor price

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Stock image

Gretchen Friemann

Bankers to AIB's €2.6bn to €3.3bn initial public offering have ordered investors to lodge bids above the floor price as early indications confirm the Government will have little difficulty offloading a quarter slice of the bank.

The development came as shares in the bank fell heavily yesterday following the publication of the prospectus on Monday evening, which set out the valuation range of the float.

The Government is seeking to sell 679m shares, or 25pc of the bank, at €3.90 to €4.90 per share. That equates to a market capitalisation of €10.6bn-€13.3bn.

An over-allotment option, or greenshoe, would expand the deal to 29pc.

The display of demand for the bank's shares at the lowest end of the range was widely expected, and has renewed speculation about the final valuation.

As the Irish Independent reported last week, hedge funds are angling for €4.50 a share.

That marks a mid point in the pricing range and is might win the Government market support for future share selldowns.

Sources close to the deal said impaired loans and the relatively poor performance of PTSB's shares after their Government's selldown, as well as uncertainty about the impact of deferred tax assets will weigh on AIB's valuation.

Irish Independent

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