Novobanco CEO targets IPO for June or September
In a message sent to employees, Mark Bourke says that Novobanco's stock market listing could take place "at the end of the second quarter or at the end of the third".
Novobanco’s CEO told employees on Thursday that the initial public offering (IPO) could take place “at the end of the second quarter or the end of the third quarter of this year”.
In the internal message to which ECO had access, sent on the day Novobank’s largest shareholder – U.S. private equity fund Lone Star – officially confirmed the progress of the operation, Mark Bourke also makes the listing dependent on “market conditions”.
“This is an important milestone and the official starting point for a journey that we have been preparing for over the last two years”, wrote Bourke. But “although this is an important step, the actual timing of the IPO is still dependent on market conditions”, he added.
“If conditions are favourable, the likely market windows are the end of the second quarter or the end of the third quarter of this year. [But] in any case, our goal remains to be fully prepared and to record a solid performance quarter after quarter”, concludes the bank’s chief executive.
Read the message in full:
“Just a short message to let you know that the Bank has received formal indication from Nani Holdings (Lone Star) to start the Initial Public Offering (IPO) process. This is an important milestone and the official starting point for a journey that we have been preparing for over the last two years.
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Although this is an important step, the actual timing of the IPO is still dependent on market conditions. If conditions are favourable, the likely market windows are the end of the second quarter or the end of the third quarter of this year. In any case, our goal remains to be fully prepared and to record a solid performance quarter after quarter.
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Thank you for your continued efforts and commitment.”
Mark Bourke, CEO of Novobanco
Internal message sent to employees
IPO plan confirmed
This Thursday, Novobanco revealed, in a statement sent to CMVM, the Portuguese Securities Market Commission, that Lone Star, through Nani Holdings, has given “formal instructions” to the board of directors to proceed with preparations for an IPO, together with shareholders Portuguese State and Resolution Fund.
The process of “implementing the IPO” (initial public offering) will take place “over the next few months” and has already been communicated to the Resolution Fund (FdR) and the Portuguese state, through the Directorate-General for Treasury and Finance, according to the same statement.
Nani Holdings is the vehicle through which the American fund Lone Star controls 75% of the capital of the bank that resulted from the collapse of the former Banco Espírito Santo (BES).
On Wednesday, Bloomberg reported that Novobanco had chosen Bank of America, Deutsche Bank and JPMorgan Chase to organise the operation. But it indicated that other banks may still be called in.
This decision follows the early end of the contingent capital agreement last December, a process that unlocked 1.3 billion euros in dividends and opened the door for Lone Star to proceed with the bank’s sale process.
As part of the IPO, Lone Star and the state are expected to sell a stake of between 25% and 30% in Novobanco. Meanwhile, a direct sale to a competitor has also been on the table.
In recent days there has been talk of possible interest from Caixa Geral de Depósitos (CGD), BCP and BPI (owned by Caixabank), and a concentration operation would have to be assessed by the Competition Authority, as recently emphasised by the governor and former governor of the Bank of Portugal, Mário Centeno and Carlos Costa, respectively.
With a 13.54% stake, the Resolution Fund said in Parliament this week that it intends to “generate revenue” and that it will hire a financial advisor to assist in the process, which will be led by Lone Star.
A further 12.46% is held by the Directorate-General for Treasury and Finance (DGTF). Finance Minister Joaquim Miranda Sarmento told ECO that “it is normal for the State to sell its stake in Novobanco” if the “opportunity arises”.
Novobanco recorded profits of 610.4 million euros up to September.
