It's a tough time to be listing a financial services company. National Australia Bank (AU:NAB) this week set a knockdown price for the flotation of CYBG, which contains Clydesdale Bank and Yorkshire Bank. The price range set for February's initial public offering is 175p to 235p a share, giving a market capitalisation of £1.5bn to £2.1bn.
The price reflects a ratio to the delisted company's net tangible assets of 0.56 to 0.76 times. This makes it cheaper than competitors Lloyds Banking (LLOY) (0.9 times) and Virgin Money (VM.) (1 times), while shares in specialist OneSavings Bank (OSB) trade at 2.6 times book.
Company | Price-book value |
---|---|
CYBG | 0.56-0.76 |
Lloyds Banking Group | 0.9 |
Virgin Money | 1 |
Aldermore | 1.3 |
OneSavings Bank | 2.6 |
Secure Trust Bank | 4.4 |
Sources: Bloomberg, company
CYBG is a potential takeover target, given its branches and SME client base in the north of England, and Scotland. Banco de Sabadell paid exactly book value when it took out TSB last year.
But retail investors wanting a piece of the action will have to wait. Three-quarters of the shares are to be kept by NAB shareholders, with the other quarter to be sold to institutional investors via the offering.