ING Gains on Plan to Cut Voya Stake with $1.2 Billion Share Sale

By and | September 3, 2014

ING Groep NV, the biggest Dutch bank, gained in Amsterdam trading after it said it will reduce its stake in a former U.S. insurance unit, Voya Financial Inc., to about 32 percent by selling about $1.2 billion of shares.

ING is selling 30 million shares in Voya, according to a statement from the Amsterdam-based Dutch lender yesterday. As part of the plan, Voya will repurchase $300 million of its common stock from ING, the companies said. The value of the stake was based on Voya’s share price, which stood at $39.37 after the end of trading in New York yesterday.

ING has been winding down its investment in Voya to comply with terms of a 2008 bailout. The Dutch company divested shares in an initial public offering in 2013 and has since reduced its holding. The new share sale would cut ING’s stake in Voya from 43 percent. The company was ordered by European Union regulators to completely dispose of its remaining insurance assets, which include a 68 percent stake in Europe-focused NN Group NV, by the end of 2016.

ING shares rose 1.2 percent to 10.68 [$14.04] at 9:28 a.m. today, bringing their advance for the year to 5.8 percent.

ING “has entered the last leg of the restructuring of its insurance operations, following which it will be a pure retail and commercial bank,” JPMorgan Chase & Co. analysts including Kian Abouhossein, said in a note to clients dated Sept. 1. It is among stocks with “material dividend payout potential.”

ING said it expects the transaction to be completed on Sept. 8.

ING last paid a dividend in August 2008, shortly before the financial crisis as the bank turned to the government for €10 billion ($13 billion). ING still owes taxpayers €1.03 billion [$1.354 billion], due by May. The bank last month said it may reimburse the government before the deadline, paving the way for a return to dividends, depending on the outcome of an asset quality review by the European Central Bank in October.

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