By Sergio Goncalves
LISBON (Reuters) – Portugal’s Novo Banco has begun preparations for an initial public offering (IPO) that could be one of the largest in Europe this year, tapping into a surge in enthusiasm for listings as indexes hover near multi-year highs.
In an email to employees on Thursday, CEO Mark Bourke said that the likely windows for the IPO would be the end of the second quarter or the end of the third quarter, depending on the market situation.
In a statement earlier on Thursday, Portugal’s fourth-largest bank said it had received instructions from U.S. private equity fund Lone Star, its biggest shareholder.
“Novo Banco will work in coordination with its shareholders on the implementation of the IPO over the coming months,” it said.
Novo Banco was created in 2014 from the collapsed BES after a state bailout, with Lone Star buying a 75% stake in 2017. The rest is held by the resolution fund, financed by Portugal’s banks, and the Portuguese state, which has 11.46%.
Lone Star had been considering an IPO or a full sale, sources with knowledge of the matter told Reuters in September, estimating that the bank could be worth about 5 billion euros ($5.2 billion).
A full sale, potentially to another Portuguese bank, now appears unlikely. The CEO has long advocated an IPO, which would keep the lender independent.
Novo Banco did not say what percentage of capital Lone Star wanted to float, or on which stock exchange the shares would be listed.
Finance Minister Joaquim Miranda Sarmento said two weeks ago that Novo Banco and Lone Star had told the government the IPO would be for 25-30% of the bank’s capital.
Buoyant equities markets have inspired several companies in the region to decide on listings.
Among them, travel technology company HBX Group raised 860 million euros in an IPO, making its Spanish stock market debut on Thursday. Its shares, however, fell heavily on their first day of trading.
($1 = 0.9593 euros)
(Reporting by Sergio Goncalves; Editing by Barbara Lewis and David Goodman)
