Clydesdale Bank valued at £2bn ahead of IPO
FT Adviser, 19.01.2016
National Australia Bank has valued the Clydesdale Bank and Yorkshire Bank at between £1.5bn and £2bn ahead of its flotation next month.
The announcement puts shares at between 175p and 235p ahead of its initial public offering on 2 February.
NAB is pursuing a demerger of 75 per cent of CYBG to NAB shareholders and a divestment of the remaining 25 per cent to institutional investors by its IPO.
In a stock exchange announcement in November, NAB said it would proceed with a demerger and IPO of the Clydesdale and Yorkshire banks as part of its planned exit from the UK market.
Michael Chaney, NAB chairman, said last month: “Having assessed a number of alternatives, the NAB board considers the demerger, in conjunction with the opportunity to undertake the IPO, is the best exit option and is likely to enhance value for NAB shareholders over the long term.
“In recent years, NAB has taken a number of steps and initiatives to strengthen CYBG’s standalone position.
“The NAB directors are of the view that CYBG is now in a position to be demerged to NAB shareholders and be listed as a standalone retail and SME bank with a strong franchise across its core regional UK markets, a strong balance sheet and capital position, a robust business plan and operating platform, as well as an experienced management team.
“The demerger provides eligible shareholders with separate investments in NAB and CYBG and if they choose to retain their CYBG securities, the ability to benefit from any improvement in the UK economy and CYBG’s strategy and performance going forward.”
According to a business recovery specialist, the loan mis-selling allegations levelled at Yorkshire Bank and Clydesdale in 2013 delayed plans for the Australian bank to leave the UK.
In November 2014, chief executive Andrew Thorburn said NAB intended to float Clydesdale Bank on the London Stock Exchange, with the aim of raising £2bn.
In April 2015 Clydesdale was fined £20.7m by the FCA for PPI failings. It had previously been the subject of a highly critical report published by the Treasury Select Committee with allegations of mis-selling swaps and loans.
The NAB bought Clydesdale Bank in 1987 and Yorkshire Bank in 1990.
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