National Australia Bank Limited (ASX:NAB) concluded the demerger of its UK business as it announced the final price of the IPO.
NAB initially announced its intention to proceed with the IPO of CYBG Plc, its subsidiary in the UK, on 18 January 2016. NAB mentioned that CYBG’s management continued to focused on controlling its operating costs and improving the product and services offering to its customers.
The bank confirmed yesterday that the demerger of its UK business became effective and expects to proceed with the IPO at 180 pence per CYBG share. NAB’s international and Australian investors including its institutional shareholders were entitled to participate.
Moreover, the bank also mentioned that CYBG recently received a request from an unnamed rating agency for certain financial information regarding the assessment of its short and long-term deposit rating. NAB hinted that this assessment could result in a downgrade for CYBG or that it maybe placed on the ‘credit watch with negative implications’ list. However, NAB shrugged off on the comments that the potential downgrade will have a material impact on CYBG’s financial position and business outlook.
NAB concluded the IPO to institutional investors at the final price of 180 pence per share, implying a market capitalisation of approximately £1.58 billion or A$3.22 billion.
NAB mentioned that the IPO will proceed as planned, and that CYBG will commence trading on the ASX on 4 February 2016 under the ticker code ‘CYB’ and will trade on the London Stock Exchange (LSE) on 3 February 2016 under the ticker code ‘CYBG’.
NAB’s Chief Executive Officer, Andrew Thoburn, was pleased with the results of the IPO: “We are pleased with the response from institutional investors to the IPO, including from NAB shareholders, despite the recent significant market volatility. The successful conclusion of the demerger and IPO of CYBG is a significant milestone for NAB that will enable us to pursue our own focused strategy in our core markets in Australia and New Zealand as we drive towards our vision of becoming Australia and New Zealand’s most respected bank.”
NAB sank more than 5% as at 11:30 AM (AEDT), as it trades ex-CYBG.
Author: Simon Herrmann
Feb 03, 2016
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.