Reuters logo
Austria's BAWAG eyes share market flotation, possibly this autumn: sources
May 24, 2017 / 12:52 PM / in 5 months

Austria's BAWAG eyes share market flotation, possibly this autumn: sources

FRANKFURT/ZURICH (Reuters) - BAWAG PSK [CCMLPB.UL] is preparing for an initial public share offer that could value the Austrian bank at up to 5 billion euros ($5.6 billion) and take place as early as this autumn, people close to the matter said.

Its majority owner, private equity investment group Cerberus [CBS.UL], might appoint global coordinators for a possible IPO as early as next month and could launch the offer after the summer break, the sources said, adding that that was only one option as BAWAG expands with acquisitions. [nZ8N1GF00S]

Cerberus, which has held its stake for a decade, has held talks with investment banks in recent weeks to hear their proposals for a sale, they said.

Cerberus could opt to sell shares worth 1 to 1.5 billion euros, valuing the bank at 4 to 5 billion euros, the sources said, adding that no decisions about when or where to list the asset had been made at this stage.

At 4.5 billion euros, BAWAG would be valued at roughly 1.5 times its book value - in line with the valuation of Nordic banks but at a premium to most banks in continental Europe.

Cerberus acquired BAWAG with other investors for 3.2 billion euros in 2007. It now owns 52 percent while GoldenTree Asset Management has a 40 percent stake.

BAWAG does not comment on its owners’ potential plans. Cerberus and GoldenTree declined to comment.

Shares in European banks on average trade at around their book value, according to Thomson Reuters data. Among Austrian lenders, Erste Group (ERST.VI) trades at around 1.1 times and Raiffeisen Bank International (RBIV.VI) at 0.8 times book value.

BAWAG’s 2017 targets include a return on equity (ROE) above 15 percent and making more than 500 million euros in profit before tax. In 2016 its ROE was 15.9 percent.

European banks on average had an ROE of 3.3 percent in the last quarter of 2016, according to the European Banking Authority.

In 2015 Cerberus appointed Goldman Sachs, Lazard and Morgan Stanley to undertake a strategic review of its investment in BAWAG, which one source said at the time could lead to it acquiring another lender, merging BAWAG with another bank or selling it.

“Unlike at the last time, there’s clear visibility on future earnings now and their profitability is far above that of many peers,” one person close to the matter said, adding BAWAG would easily realize a valuation of more than 1.5 times book value.

Cerberus is so far not working with an adviser to help it select IPO banks and it may still opt to list BAWAG at a later stage if discussions with potential investors lead it to believe it can sell for a higher price, this source said.

Editing by Maria Sheahan, Greg Mahlich

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below