ABN Amro Said to Pitch Valuation of $17.5 Billion Pre-IPODavid de Jong and Ruth David
Dutch government preparing IPO of bank it bailed out in 2008
Valuation is about the same price as lender's book value
ABN Amro Group NV is marketing itself to potential investors in its initial public offering at a value of about 16 billion euros ($17.5 billion), according to three people familiar with the matter.
The Amsterdam-based lender is pitching itself as a local consumer bank that should trade at the same price as its book value, a measure of assets minus liabilities, the people said, asking not to be named because the details aren’t public. No final decision has been made on valuation as the bank prepares to present a price range to investors as early as next week, they said.
ABN Amro is fashioning its valuation in line with Dutch competitor ING Group NV, which trades at about 1.1 times book value, as well as a group of European banks as its peers, the people said.
“It would be an attractive price for a bank that generates returns structurally above book value,” Matthias de Wit, an analyst at KBC Securities in Brussels, said by phone.
The Dutch government, which took over ABN Amro in a bailout seven years ago, plans to sell shares in Amsterdam as soon as the fourth quarter, according to a statement last week. Proceeds will go to the state, which is seeking to recover some of the 22 billion euros it spent on the rescue.
The government has said it may sell as much as 30 percent of ABN Amro this year. Dutch Finance Minister Jeroen Dijsselbloem said he’s seeking the best price possible in a press meeting in The Hague yesterday.
ABN Amro is seeking to lure private investors after having the most profitable quarter since it was reinvented in 2010. The bank said last month that it plans to pay out 50 percent of profit in dividends in 2017, up from 40 percent this year.
Officials for the Dutch government, NLFI, which owns nationalized financial companies on behalf of the Dutch government, and ABN Amro declined to comment on the valuation.
Morgan Stanley, Deutsche Bank AG and ABN Amro are managing the IPO, along with Bank of America Corp., Barclays Plc, Citigroup Inc., JPMorgan Chase & Co., ING Groep NV and Rabobank. The shares will trade on Euronext Amsterdam.