ABN AMRO IPO May Be In The Works

The Dutch government said it was moving ahead with a sale of shares of the state-owned bank ABN Amro, probably as an initial public offering in the fourth quarter of 2015.

The sale of the bank must be approved by the Dutch parliament, but it is the logical next step for the government in trying to recover the 20 billion plus  euros it pumped into the bank in a rescue seven years ago.


ABN AMRO IPO is recommendation of Dutch finance minister

In a letter to Parliament on Friday, Jeroen Dijsselbloem, the Dutch finance minister, said an I.P.O. would be the best option for selling the government’s stake. The government highlighted the bank has been valued at close to 15 billion euros ($16.7 billion) in earlier estimates by external experts. The deal could end up as one of the biggest I.P.O.s ever in Netherlands.

Of note, the Dutch government noted it plans to sell shares of the bank in phases and was likely to hold a substantial stake in the bank for some time. The first stake sale will probably be in the 20-30% range and could come by the end of the year.

The current financial institution traces back to ABN Amro Holding, which was dismantled eight years ago in a complex €71 billion deal in which the Royal Bank of Scotland, Banco Santander of Spain and the Belgian Fortis all acquired divisions of ABN Amro.

The Dutch assets of Fortis were nationalized during the 2008 financial crisis at a cost of close to €21 billion to taxpayers. The plan has always been to only seek to return to the private markets if the financial sector was stable and there was strong interest in the market for the shares.

Analysts note the move comes just eight weeks since Dijsselbloem delayed a decision on an ABN Amro IPO after a disagreement with lawmakers about exec compensation. ABN Amro’s top managers gave up on a promised pay increase after the public hullabaloo.

Statement from ABN AMRO chairman

“We agree with the finance minister’s conclusion that an I.P.O. is the best option for selling ABN Amro,” Gerrit Zalm, the chairman of ABN Amro’s managing board, a post that is the equivalent of chief executive, commented in a statement.

“This is a logical next step in the bank’s development,” Zalm continued. “The internal preparations we have made this past year are well on track, and both the managing board and the supervisory board believe that ABN Amro is ready for an I.P.O.”