Unicaja attracts investor interest for 40% of its capital

UnicajaUnicaja joins Ibex 35 from 27 December

Unicaja has announced it has received sufficient demand to cover its stock market listing, due on June 30, and expects to raise 875 million euros. The offers presented are not binding as no definite price has yet been obtained.

The bank has received investment applications to place up to 40.4% of capital, some 625 million new shares, and make it stock market debut. The goal is to obtain between 659,6 million euros and 841,5 million euros, without taking into account the over-subscription option or ‘greenshoe’ and after underwriting fees and other expenses are deducted.

The offers received are not binding but are within the indicative price range (€1,10/€1,40/share), according to Unicaja. The final price will be announced on June 28. With this share offer, Unicaja plans to strengthen its capital ratios and amortise ahead of time 604 million in CoCos (contingent convertible bonds) which were underwritten by the FROB. The maturity date for these bonds is 2018. The lender will also use part of the cash raised to buy the FROB’s stake in its subsidiary EspañaDuero for 62 million euros.

Unicaja is the eight biggest bank in Spain by volume of assets, with a balance sheet of €56 billion, a loan book of €33.369 billion – mortage lending represents 60% – and a ratio of Loans/Deposits of 73.6% (vs the 115.9% sector average). This implies a high level of liquidity and a reduced credit risk.

According to Bankinter analysts, the indicative price range values the bank between 1.7 billion and 2.165 billion “which implies a valuation multiple of 0,58/0,74x current book value.”

At first sight – there are no details of the Business Plan – this appears to be an attractive multiple if the share placement is made in the mid/low indicative price range (Price/Book Value of around 0,6x). It offers an interesting discount (42%/17%) in relation to the rest of the listed domestic banks (Caixabank: 1,0x; Bankia: 0,9x; Sabadell: 0,7x).

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The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.