Saturday, May 28

Ibercaja: the board of directors meets to finalize the IPO

Ibercaja is about to act the button to start the output process to bag, which is expected to materialize in February, when a window of opportunity appears in the market. The board of directors of the Aragonese bank meets this Wednesday with this important matter on the table, an appointment in which it could kick off a transcendental operation for the future of the entity, as El Periódico de Aragón has learned from well-informed sources. If the approval does not finally occur on this day, the highest governing body would meet again in imminent dates to deliberate and authorize the release from the jump to the parquet, always before February 1, which is the deadline that has been set.

Officially, Ibercaja avoided confirming or denying this possibility and refused to comment in this regard, alluding to the confidentiality that must surround a process in which each step must be communicated to the National Securities Market Commission (CNMV).

There is no doubt that Ibercaja’s governing bodies have held meetings in recent days to address and prepare for the stock market debut. On Tuesday there was one of the general meeting of shareholders and last Friday the board of directors did it, which this Wednesday has been summoned again and could do so again this week if necessary to officially give the green light to the IPO, according to sources familiar with the process.

“All the steps are being prepared to take advantage of the window of opportunity that the board considers most appropriate, which could be the one in February”, affirmed a source familiar with the process, who pointed out as “possible” that this approval will take place soon. From the unions they assured that they do not know when this decision will take place but they believe that “Is falling“.

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Steps to follow for the stock market jump

Once the board gives the go-ahead, Ibercaja will have to send the CNMV the formal document with which it reveals its intention to list (‘intention to float’ or ITF) and the bank would start take the pulse of large investors to assess the interest wake up operation, something that has already been probing in recent weeks. A few days later, the project brochure would be published, in which the characteristics and prices of the shares are detailed, details that the bank will make known to analysts and potential investors in a ‘roadshow’ through the main financial markets in the world . From that moment and if nothing goes wrong along the way, there would be a period of between three and five weeks for the symbolic campaign touch to take place which marks the stock market debut.

Ibercaja has recently expressed its intention to go public in the first quarter of 2022 if market conditions were favorable, a decision that has already had to be postponed several times in recent years due to different circumstances. The entity has until the end of 2022 to materialize its jump to the parquet, as required by the law of the old savings banks so that the Banking Foundation reduces its participation in its capital below 50%, which is now 87.5%. The time limit initially expired at the end of 2020, but the Government of Spain granted it a two-year extension after the outbreak of the coronavirus pandemic, which made the execution of this operation unfeasible.

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The Banking Foundation wants keep a stake of between 40% and 49%, depending on market conditions. In this way, it would remain the majority minority shareholder to ensure the bank’s strategy.

A favorable context

The expected window of opportunity could come in February for various reasons. On the one hand, external factors are blowing in favor of the financial sector due to the normalization of monetary policy. And on the other hand, the entity is internally at its best moment to face this historical process, with some economic results that have improved notably in the last year. In the first nine months of 2021, it obtained a net profit of 146 million euros, double that of the same period of the previous year.

The entity has also managed to substantially improve its profitability, efficiency and solvency ratios, indicators that it hopes to reinforce in the coming months when the application of the last employment regulation file (ere) agreed with the unions, which contemplates the departure of 750 workers and the closure of 199 bank branches (until last December a third of these had already been closed).

For all these reasons, Ibercaja’s business prospects have improved, which is why it modified upwards theThe return on equity (ROTE) targets of up to 9% by 2023, compared to the 7% initially estimated, thus the control of delinquency, as reported in December to the CNMV. In this way, it would be able to cover the cost of capital, as the ECB demands from the sector.

As published by ‘Expansión’, the bank closed preliminary contacts with investors this week, a step prior to the board of directors being able to decide on the launch of the move to the parquet. This economic newspaper ensures that your plan is to start trading with a Rating between 1,650 and 2,100 million euros. The objective of Ibercaja’s management would be to have the support of large investors, such as investment funds of recognized prestige in the market.

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Rothschild acts as an independent advisor to Ibercaja, which also has Morgan Stanley and JPMorgan as global coordinators for the IPO and UBS and Bank of America as placement entities.

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