ONESAVINGS Bank is floating on the main London market, the private equity-backed lender said yesterday, with an expected value of £500m to £600m.
Investor JC Flowers took a major stake in the Kent Reliance Building Society in a recapitalisation deal in 2010, restructuring and renaming the firm.
It hopes OneSavings’ range of specialist lending brands, including several property lending units, will appeal to institutional investors who are less active in these niches.
This is the first time a bank has listed on the main exchange since Bradford and Bingley in 2001. In addition, OneSavings has pipped TSB to the post – the Lloyds spin-off want to float by the end of next month.
Arbuthnot-owned Secure Trust Bank has listed in the intervening years, but used the Alternative Investment Market (Aim).
“2013 was the first year of demonstrating a return on equity and strong growth, so it was a natural point to consider a flotation,” chief executive Andy Golding told City A.M. “We are a specialist lender and we play in niche markets where there are gaps that the larger lenders are leaving behind – there is plenty of room for growth.”
In part the bank will use the funds raised in the IPO to improve its capital ratio, as well as funding further expansion plans.
BEHIND THE DEAL
CANACCORD GENUITY | ROGER LAMBERT
1 Roger Lambert is chairman of corporate broking and has worked on big deals this year, including Poundland’s IPO.
2 Although he is a generalist, this is certainly not Lambert’s first deal in the specialist banking market – he has raised funds in the past for Secure Trust Bank, among others.
3 We should not expect to see him rest on his laurels. Canaccord has had a busy year so far and is only expected to get more work as confidence picks up both in firms listings and in M&A activity.
Canaccord is a joint bookrunner on the deal, alongside RBC Capital Markets. OneSavings Bank has also hired Macquarie Capital as co-lead manager on the flotation, and Rothschild as financial adviser. Meanwhile a team from Barclays is the transaction’s global co-ordinator, sponsor and joint bookrunner.