October 25, 2018 / 4:14 PM / 21 days ago

Spanish bank Ibercaja checks out advisers for $1.5 bln float -sources

LONDON/FRANKFURT/MADRID, Oct 25 (Reuters) - Spanish bank Ibercaja has been in touch with advisers on a potential initial public offering (IPO), two sources familiar with the matter said, part of a legal requirement to protect the financial health of Spanish savings banks.

The listing could value Ibercaja, Spain’s ninth biggest bank, at about 1.3 billion euros ($1.48 billion), based on a valuation of its rival Unicaja.

Former savings banks like Ibercaja are required by Spanish law to go public or raise money to reduce stakes held by foundations, which support the local community and fund development projects.

This was part of the terms of the European Union bailout for Spain’s banks after the financial crisis and is now part of Spanish law.

Ibercaja, which had assets of 52.6 billion euros as of June 30, decided to go public and has until 2020 to do so.

Ibercaja Chairman Jose Luis Aguirre said in March in a presentation on the bank’s 2018-2020 strategy that the plan was to go public in 2020.

An Ibercaja spokesperson said the bank was currently not working on any plans to go public.

Ibercaja is currently controlled by its main foundation shareholders, including Fundación Ibercaja, which holds an 87.8 percent stake.

M&A

In 2013, the bank took over smaller rival Caja 3, part of a series of mergers to strengthen Spanish banks which were weakened after the bursting of a decade-long property bubble.

The mergers have shrunk the number of banks in Spain to 12 from more than 55 five years ago.

Ibercaja did not take any state aid, but Caja 3 received 407 million euros in European funds as part of the 41-billion-euro bailout of Spain’s financial sector. Ibercaja has already repaid this.

Ibercaja’s rival, Unicaja went public in June last year, when its shares rose as much as 9 percent from the IPO price of 1.10 euros per share.

Ibercaja could have a stock market capitalisation of around 1.3 billion euros based on its book value of 2.9 billion euros on June 30 and Unicaja’s price to book value ratio of around 0.45 times, according to Refinitiv data.

Ibercaja has more than 1,200 branches around the country and more than 5,500 employees.

The Spanish IPO market has had a few flops this year. Residential property developer Metrovacesa performed poorly in its IPO in February. More recently, energy company Cepsa shelved its IPO plans, blaming market conditions. ($1 = 0.8785 euros) (Editing by Jane Merriman)

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