Clydesdale Bank valued at up to £2bn for flotation

Shares in UK-based Clydesdale Bank, which is run by Irish man and former AIB chief executive David Duffy, will be offered at between 175 pence and 235 pence per share, its Australian parent company has said.

National Australia Bank Limited plans to demerge Clydesdale, which includes Yorkshire Bank, by offering 25 per cent of its stock to institutional investors as part of an initial public offering (IPO) of CYBG plc. The balance of shares will be given to National Australia Bank shareholders on a pro-rata basis.

The price range equates to a market capitalisation of £1.54 billion-£2.07 billion and implies a multiple of book value of CYBG’s full-year 2015 net tangible assets of 0.56 to 0.76 times.

CYBG’s senior management, which includes another former AIB executive, Fergus Murphy, began a global marketing roadshow for the IPO in London yesterday.

NAB said it might elect not to proceed with the IPO or to only proceed with a partial IPO, in which case it would retain a shareholding in CYBG. The demerger is not conditional on the IPO proceeding.

Final price

NAB said the final IPO price would be determined by the book-build process and would be announced on February 2nd, when CYBG’s shares will list on the London Stock Exchange’s main market.

A meeting of NAB shareholders to approve the demerger will be held on January 27th in Melbourne.

CYBG provided a update on its operational performance last week, which showed that trading in the three months to December 31st was in line with the board’s expectations.

Momentum in the loan book was maintained, with 6.6 per cent annualised growth in mortgages, the company said.