Dutch State Agrees to Sell ABN Amro Stake, Raising $1.4 Billion

  • Remaining 70 percent stake will be subject to lock-up period
  • Dutch state agreed to sell shares for 20.40 euros a piece

The Dutch state agreed to sell a 7 percent stake in ABN Amro Group NV for about 1.3 billion euros ($1.4 billion), taking advantage of a rising stock price a year after returning the bank to the market in an initial public offering.

The government sold 65 million depositary receipts representing ordinary shares for 20.40 euros a piece, the NLFI, the government entity that manages nationalized financial assets, said in a statement on Thursday. The remaining 70 percent stake will be subject to a lock-up period of 90 days after settlement, it said.

ABN Amro has gained about 18 percent since the Dutch state sold 23 percent of the bank in the IPO about a year ago, outperforming European rivals that struggled to raise capital buffers and profitability. Dutch Prime Minister Mark Rutte’s government, which faces an election in about four months, has said it plans to sell the rest of ABN Amro over time.

“We have followed the market closely, and decided this was the right moment to sell another stake,” said Huub Hieltjes, a spokesman for NLFI.

The shares slipped 2.5 percent to 20.37 euros at 9:27 a.m. in Amsterdam. They have declined about 1.4 percent this year, while the 38-member Bloomberg Europe Banks and Financial Service Index dropped 14 percent.

ABN Amro on Wednesday reported a 19 percent jump in third-quarter profit, beating analyst estimates, and said that it plans to eliminate 1,500 jobs to help deepen cost cuts.

“The size of the placement was a bit lower than expected, said Matthias de Wit, an analyst at KBC Securities in Brussels. “Perhaps this is a sign that the appetite for the stock in the market is lower than expected.”

The lender is a remnant of the company that fell prey to a takeover in 2007 by a group including Royal Bank of Scotland Group Plc, Banco Santander SA and Fortis NV. The Dutch state stepped in the following year to rescue the bank in the throes of the financial crisis, spending almost 22 billion euros in the process. Under government ownership, ABN Amro transformed itself from one of the world’s largest banks to a consumer lender focused on the Netherlands.

When it appointed Chief Financial Officer Kees van Dijkhuizen last week to succeed Chief Executive Officer Gerrit Zalm, the bank had unveiled plans to cut as many as 1,375 jobs by 2020., the bank said one of his tasks will be to complete the privatization. Finance Minister Jeroen Dijsselbloem heralded the executive’s “strong sense for society.”

“They’re just sort of taking the profit at this moment, which is fair,” said Vardhman Jain, an analyst at Macquarie in London with an outperform rating on the shares, said of the Dutch government. “They have disclosed that they would gradually phase out” their investment, “and it’s in line with that.”

— With assistance by Vogeli Voegeli

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