Noonan says UK election won't affect AIB's stock market return

The State-owned bank still set for summer flotation....

Noonan says UK election won't affect AIB's stock market return

Image: RollingNews.ie

Minister for Finance Michael Noonan has moved to allay fears that the snap UK election in June will delay AIB's stock market flotation.

Speaking at the inauguration of the Central Bank's new docklands HQ in Dublin yesterday, Mr Noonan insisted the timeframe for the bank's return to the stock market had not changed.

He noted that the IPO had always been scheduled for some time between mid-May and early July and that the election "doesn't change the window", though he did not get more specific.

Last week, Bloomberg reported that the Government was preparing to hold off the IPO until the outcome of the June 8th election became apparent.

The minister added:

"We haven't decided on any particular date. What we have said is that there is a window of opportunities for a variety of reasons between mid-May and in June and the UK election doesn't interfere with that window."

 

Business editor Vincent Wall told Newstalk Breakfast:

"Advisors to the proposed move were probably watching the outcome of the first round of French elections as closely as anybody. That outcome impacts not only the likely timing of the move but may also possibly [impact] AIB’s valuation, if these gains were to hold."

With Emmanuel Macron's strong performance in the first round of voting on Sunday giving European stocks a boost this week, the likelihood of an overall Macron victory should increase investor demand for a slice of AIB.

The ISEQ index closed 23.1% higher at 6,946.55 points, reaching a level not seen since January 2008.

Permanent TSB and Bank of Ireland were two of the big gainers following Macron's win, with Bank of Ireland’s share price closing 4% higher at 26c on Monday.

Earlier this month, it was revealed that the Department of Finance has taken on six more financial groups as advisors.

Citigroup, Goodbody Stockbrokers, Global Markets, JP Morgan, Goldman Sachs International, UBS and Investec Bank will assist the department as AIB moves towards an IPO.

The bank said in a statement:

"The rationale for selecting these firms, in addition to the already appointed Joint Global Coordinators, is to ensure coverage of the broadest possible range of relevant investors both by type and geography."

Some 25% of the State-owned bank is expected to go in a near €3bn flotation on London and Dublin markets. The State currently owns 99.9% of the bank, which was bailed out by the taxpayer to the tune of €20.8bn during the financial crisis.