Ireland plans to sell 25pc AIB stake

DUBLIN: The Irish government fired the starting gun for the initial public offering (IPO) of Allied Irish Banks Plc (AIB), laying out a plan to sell 25 per cent of the nationalised lender.

The government planned to sell the AIB stake in a share offering in London and here, with terms to be set in the middle of this month, said the Finance Ministry in a statement on Tuesday.

According to previous government estimates, the sale may raise about €3 billion (RM14.6 billion).

“The strong progress made by AIB and current market conditions mean that now is the right time to commence this process,” said Finance Minister Michael Noonan in the statement.

The state, which spent €21 billion bailing out the bank following the 2008 financial crisis, is seeking to recoup part of its investment in the first of a series of stake sales.

The offering will likely be London’s largest IPO so far this year. Ireland’s government owns 99.9 per cent of AIB, and Noonan has said it may take a decade to fully privatise the lender.

The agency that manages the government’s shareholding, the Ireland Strategic Investment Fund, valued AIB at €11.3 billion in February. Government officials now expect the bank to be worth more than that after the lender released its 2016 results, including a pre-tax profit of €1.7 billion.

Analysts at banks working on the IPO were valuing the company at about €10 billion to €13 billion, said people familiar with the matter. The final value will depend on investor feedback. A valuation at €12 billion would suggest a price of about €4.50 per share.

The pricing will be finalised after the United Kingdom’s election on June 8. Bloomberg Amount spent to bail out AIB following the 2008 financial crisis