SHARES in NN Group, the insurance arm of Dutch financial services company ING Group, rose more than five per cent on their stock market debut yesterday, in what was set to be Europe’s largest initial public offering (IPO) so far this year.
ING priced the shares at €20 each late on Tuesday, the middle of the range, valuing NN Group at roughly €7 billion (RM30.60 billion), it said. The shares immediately rose above €21.
ING said it expected the listing to raise about €1.5 billion. It had increased the number of ordinary shares being listed by 10 per cent to €77 million due to “significant” investor demand.
The group has been forced to spin off the insurance business as part of the terms of a €10 billion bailout at the height of the financial crisis.
The offering will have an estimated negative impact of approximately €3.4 billion on ING Group’s shareholders’ equity, to be booked in the third quarter, it said.
The insurance business was once ING’s mainstay, with highly profitable global operations, when it was a leading proponent of the then fashionable bancassurance business model.
But ING, then one of the world’s largest banks, has had to sell off tens of billions of dollars in foreign assets, reshaping itself to comply with the terms of the rescue, shedding investment banking operations and cutting thousands of jobs.
Its ownership of NN Group will be reduced to 71.4 per cent at the flotation, excluding the exercise of a 15 per cent over-allotment option.
The Dutch financial services company said it intends to use the net proceeds of the offering to reduce its double leverage.
Of the shares being offered, approximately 94.8 per cent were allocated to Dutch and international institutional investors, it said, while approximately 5.2 per cent went to Dutch retail investors.
The listing comes a day after the Dow Jones and S&P 500 closed at record highs and amid high global demand for IPOs.
Companies around the world have raised US$107.2 billion (RM343.52 billion) from stock flotations in the first half of this year, a 60 per cent jump from a year earlier.
The cash raised in European IPOs rose almost 250 per cent to US$41.2 billion through June 30. But there have been recent signs of cooling as, spoilt for choice, investors are becoming more selective.
Some listings in the past few weeks have struggled to attract investor interest in the bookbuilding process and their shares have traded down after their share flotation. Reuters
- Investment & Company Information