- Price range of EU18-EU22 a share gives value of EU3.3 billion
- Insurer part of Dutch takeover of Fortis in financial crisis
The Dutch government is seeking to raise as much as 1.32 billion euros ($1.5 billion) in an initial public offering of ASR Nederland NV as it begins to pare back its holding in the insurer that was nationalized during the financial crisis.
The Netherlands plans to sell a stake of about 40 percent in the Utrecht-based company, including an overallotment option, at 18 euros to 22 euros a share, valuing the company at as much as 3.3 billion euros, the government said in a statement Monday. It would be the biggest initial public offering of a Dutch insurer since NN Group NV raised 2.2 billion euros in July 2014.
“We are ready for a publicly listed future and we look forward to presenting our business and the investment case to prospective investors over the coming period,” ASR Chief Executive Officer Jos Baeten said in the statement.
The government is reducing its ownership in financial assets that it took over in the financial crisis. Last year it sold a stake in ABN Amro Group NV and has announced plans to sell the rest of its holdings in the second-biggest Dutch bank.
The subscription period begins at 9 a.m. on Tuesday and trading on Euronext Amsterdam is set to start trading on June 10.
ASR’s first-quarter profit climbed to 214 million euros from 184 million euros a year earlier, the company said in the statement. Return on equity declined to 12.6 percent from 14.8 percent a year earlier.
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, with 4 billion euros earmarked for ASR. Fortis was one of the three parties that bought ABN Amro as part of a 72 billion-euro takeover in 2007. The deal, the largest financial-services takeover at the time, turned sour a year later as financial markets seized up.
ASR is one of at least four Dutch companies proceeding with IPO plans this year, alongside Basic Fit and infrastructure developer SIF Holding NV. Royal Philips NV lighting business went public on Friday. Dutch companies raised almost $8 billion from IPOs last year, with more than half from ABN Amro’s listing, according to data compiled by Bloomberg.
ASR is most similar to Delta Lloyd NV in terms of size and geography as their insurance and pension businesses are mainly focused on the Netherlands, according to Joost van Beek, an analyst at Theodoor Gilissen Bankiers NV.
“Given ASR’s high solvency ratio and dividend yield, the insurer will likely be closer to NN in terms of price-to-tangible-book value than to Delta Lloyd or Aegon.” Van Beek said by phone from Amsterdam. The valuation ratio is 0.4 for NN Group, 0.45 for Aegon NV and 0.63 at Delta Lloyd.
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.