BANKIA, the Spanish caja group, was forced to cut its float price drastically yesterday as Eurozone turmoil threatened to derail a deal seen as vital to keeping Spain’s banks out of full nationalisation.
A source close to the situation reported that those on the deal were considering shrinking its size by €100m last night, after cutting the price to €3.75, well below its initial range of €4.41- €5.05.
Bankia could now raise €3bn – at the lower end of its target range for new funds – in what bankers have called a “bellwether” float for European financials.
The cut-price float offers shares to investors at 0.4 times book value after jittery international investors left much of the book to be filled by domestic demand. But it is understood that the book was considered covered last night at the new price.
The syndicate, which includes Deutsche Bank, Bank of America/Merrill Lynch, UBS and JP Morgan, has been fighting some of the worst conditions for EU banks since the financial crisis, with many falling over six per cent yesterday.
Banca Civica, a smaller Spanish savings bank group, is also hoping to raise €700m in a float this week and aims to close its book tomorrow after delaying its deal by a day.
MEET THE ADVISERS
NEIL KELL AND ED SANKEY
DEUTSCHE Bank’s Neil Kell and Ed Sankey have the unenviable task of pulling off DB’s part in the Bankia float, which is taking place in some of the most difficult conditions imaginable for European financials.
Kell moved to Deutsche from Bank of America Merrill Lynch last year to become head of the financial institutions group in equity capital markets (ECM).
Deutsche has had a bumper year for financial equity capital raisings so far, topping league tables in the sector year-to-date.
It has been on deals for Commerzbank, Danske Bank, VTB and Nomos.