ING won strong support from shareholders for a heavily discounted rights issue, helping the Dutch bancassurer cut its reliance on state aid and clearing the way for it to launch a program of mandated asset sales.
ING said on Wednesday that investors took up 97 percent of almost 1.77 billion new shares in the €7.5 billion ($10.92 billon) offering, which was pitched at 37.3 percent below the theoretical ex-rights price.
“This is good, it’s absolutely successful,” said Fred Huibers from Dutch asset manager Het Haags Effektenkantoor, which owns no ING shares.
ING shares were up 2.5 percent at €6.75 [$9.83] at 0854 GMT, outperforming a DJ Stoxx European banking sector that rose 1 percent.
The take-up was on a par with a rights issue by British bank Lloyds, which said on Tuesday holders bought 95.3 percent of new shares in a $21.9 billion offering.
ING plans to use €5.61 billion [$8.17 billion] of the proceeds from its offering to partly repay the Dutch government next Monday for a bailout it received in Oct. 2008.
ING said on Wednesday a rump offering for the 54.3 million shares that remained unsold would be conducted later in the day.
CUTTING A DEAL
It announced the rights issue on Oct. 26 to coincide with news of the breakup deal, struck with the European Commission in return for the bailout.
ING is selling off its insurance assets, its investment management activities, its Dutch mortgage operations and its U.S. online bank by the end of 2013. What remains will be a heavily European-focused retail bank, with some investments in Asia.
ING will also use some of the rights issues proceeds to pay the state more for a €22 billion [$32 billion] asset guarantee scheme agreed to last January. That larger payment was another condition of the EU deal.
Het Haags Effektenkantoor’s Huibers said with the rights issue out of the way, how ING conducts the breakup will determine how its shares perform in the near future.
“Will it be in small steps at attractive prices or perhaps a big step but for a lesser price? I would like to see relatively small sales at good prices to show ING can resist pressure to sell for bottom prices,” he said.
(Additional reporting by Gilbert Kreijger; editing by Simon Jessop, John Stonestreet)
Topics Europe
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