Netherlands Plans IPO of Insurer ASR as Soon as This Quarter

  • Dutch state selling assets split off from Fortis rescue
  • Goverment plans to retain ‘significant holding’ after listing

The Dutch government plans to sell shares in ASR Nederland NV in an initial public offering for the first time since the insurer’s parent Fortis was nationalized during the financial crisis.

The state plans to float the shares on Euronext Amsterdam as early as the second quarter, according to a statement on Friday. The size of the offering will be subject to market and other conditions. The Dutch government will receive the net proceeds from the offering and retain a “significant holding" after the listing, though it plans to eventually exit the entire holding.

“ASR looks forward to the new phase after privatization,” ASR Chief Executive Officer Jos Baeten said in the statement.

The sale will be the second IPO of assets nationalized by the Dutch state during the financial crisis in less than a year, following ABN Amro Group NV’s share sale in November. Dutch Finance Minister Jeroen Dijsselbloem has said that the government could float more than 23 percent of ASR, more than it sold in ABN Amro. ASR has a book value of 3.2 billion euros ($3.6 billion), he said at the time.

‘Difficult’ Conditions

The timing of the initial public offering could still prove difficult as market volatility and low interest rates put banks and insurers under pressure. At the same time, they’re struggling to adapt to new, technology-driven environment.

“The market circumstances are difficult at the moment,” Joost van Beek, an analyst at Theodoor Gilissen Bankiers NV said by telephone. “The financial sector is performing badly on the stock exchange.” 

ABN Amro shares are now trading below the introductory price of 17.75 euros. Aegon NV reported a 50 percent drop in first-quarter profit on Thursday after the company lost 358 million euros on investments in hedge funds and commodities. Local rival Delta Lloyd had to have a rights issue earlier this year amid concerns about its capital buffer.

The government split Fortis’s Dutch banking and insurance operations to create ABN Amro and ASR after rescuing the units for 16.8 billion euros during the 2008 crisis. Fortis had joined a 72 billion-euro takeover of ABN Amro Holding NV with Royal Bank of Scotland Group Plc and Banco Santander SA in 2007. The deal, the largest financial services takeover at the time, turned sour during the credit crunch a year later.

Asset Sales

Unlike ABN Amro, ASR didn’t receive any state aid after being nationalized. Therefore it was allowed to sell assets, including its real estate development unit, and make acquisitions.

ASR is the third Dutch company to announce IPO plans this year, following Royal Philips NV’s plan to list its lighting business and SIF Holding NV. Dutch companies raised almost $8 billion from IPOs last year, with more than half coming from ABN Amro’s listing, according to data compiled by Bloomberg.

ASR’s 2015 profit rose 42 percent to 601 million euros from a year earlier, while its return on equity increased by 17.2 percent from 11 percent. The company plans to pay 175 million euros in dividends on 2016 earnings with a payouts of 45 percent to 55 percent of operating profit starting next year, it said Friday.

ABN Amro, Citigroup Inc. and Deutsche Bank AG are acting as global coordinators on the sale. Those banks, together with Barclays Plc, Rabobank, HSBC Holdings Plc, and ING Groep NV, are joint bookrunners.

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