Allied Irish Banks ties up IPO with €12bn valuation as Ireland raises €3bn

Rebecca Smith
An Allied Irish Bank branch is pictured
Ireland raised around €3bn (Source: Getty)

The Irish government has floated Allied Irish Banks (AIB), raising at least €3bn in the IPO, which valued the group at €12bn.

The offering was priced at €4.40 a share, and the offer comprises 679m existing ordinary shares. The €12bn valuation is in the middle of the previously announced range.

The government raised €3bn, assuming no exercise of an over-allotment option, and €3.4bn if it is exercised.

Read more: Allied Irish Banks float could see Irish taxpayer paid back in full

Ireland's government will hold 71-75 per cent of AIB's shares following the sale, and it intends to gradually sell down its stake.

Around 90 per cent of the base offer has been allocated to institutional investors, and 10 per cent to retail investors.

Paschal Donohoe, minister for finance and public expenditure and reform, said:

The successful completion today of AIB’s IPO represents a significant milestone in the government’s long-held policy to dispose of our banking investments, returning them to the private sector over time.

The offer was very well received and attracted high demand from investors everywhere it was marketed, reflecting the strength of AIB’s investment story and prospects, and the attractions of Ireland’s vibrant and growing economy.

This successful IPO has created a strong platform for the state to recover all the money it has invested in AIB and to further dispose of our banking investments for the benefit of the Irish people.

The government confirmed last month it was floating the bank, and the €12bn valuation makes it London’s biggest flotation since Glencore went public in 2011 with a valuation of £36bn.

A number of banking giants were drafted in to work on the float. Bank of America Merrill Lynch, Davy and Deutsche Bank were joint global co-ordinators, while Rothschild has been independent financial adviser to the Irish government.

The government paid nearly €21bn to rescue the bank during the financial crisis. AIB has returned €6.5bn to the Irish taxpayer by way of capital, fees, coupons and dividends, since being bailed out.

Read more: Irish government confirms plans to float €12bn Allied Irish Banks in London

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