The State is on track to secure €2.99 billion for a quarter stake in AIB, as the initial public offering of the bank is set to price on Thursday evening at the middle of a range outlined last week, according to sources.
Investment bankers working on the transaction warned would-be large investors an hour before a noon deadline for subscriptions that they risked being locked out of Europe’s largest IPO so far this year if they came in with orders below €4.40 per share.
Sources said that that the deal will price at that level, giving AIB an initial market value of €11.94 billion as it returns to the main stock markets in London and Dublin on Friday morning for the first time since it was seized by the Government in December 2010. They said that the deal, at that level, was well oversubscribed.
Bankers and corporate financiers working on the deal, led by Deutsche Bank, Davy and Bank of America Merrill Lynch, are set to work with Department of Finance officials late into the night on allocating stock to various investors. Analysts working with the advisers on the deal had estimated late last month that AIB could be worth between €11 billion and €13 billion.
A spokesman for the Department of Finance declined to comment, saying the price of the deal will be communicated to the market at 7am on Friday.
While the Government is initially selling a 25 per cent stake in AIB, the banks underwriting the deal have an option to buy up to a further 3.8 per cent stake from the State in the coming weeks and place these shares on the market, subject to investor demand.