ING Prices NN Group IPO At 20 Euros/share, Raises 1.5 Bln Euros

(RTTNews) - Dutch lender ING Group N.V. (ING) said Tuesday that has priced the initial public offering of 77 million ordinary shares of its insurance arm NN Group N.V. at 20 euros per share, resulting in gross proceeds of about 1.5 billion euros, or $2.05 billion. The offer price is at the mid-point of the company's initial range.

ING said in mid-June that it will sell 70 million existing ordinary shares in NN Group in an initial public offering at an estimated price range of 18.50 to 22.00 euros per share.

Including the exchange into NN Group shares of 450 million euros of mandatorily subordinated notes under an agreement with three Asian investors, and excluding the exercise of the over-allotment option, gross proceeds to ING at settlement of the IPO will be about 2 billion euros. ING intends to use the gross proceeds to reduce debt.

Based on 350 million NN Group shares outstanding at settlement of the IPO, the offer price values NN Group at 7 billion euros.

NN Group, currently a wholly-owned subsidiary of ING, is an international insurance and investment management company offering retirement, life insurance, non-life insurance, investment management and banking to its customers across Europe and Japan.

The announcement of NN Group's IPO is in line with ING's objective to divest its insurance and investment management businesses and become a pure bank. It has already disposed of insurance assets in the U.S., Latin America and Asia.

The divestment is also part of ING's ongoing asset or stake sale in order to comply with an agreement reached with the European Commission while getting approval for the 10 billion euros Dutch state aid during the financial crisis in November 2008. The EU had ordered ING to shrink its balance sheet significantly.

ING said that about 94.8 percent of the offered shares in the IPO were allocated to Dutch and international institutional investors, while about 5.2 percent of the shares were allocated to retail investors in the Netherlands.

NN Group shares are expected to be listed and start trading on Euronext Amsterdam on Wednesday, July 2, 2014 under the listing name "NN Group" and the symbol 'NN'. The settlement date and the start of unconditional trading are expected to take place on Monday, July 7, 2014.

Following the sale of 77 million shares in the IPO and the exchange of the 450 million euros subordinated notes into NN Group shares, ING's ownership in NN Group will reduce to 71.4 percent at the settlement of the IPO.

ING has granted the joint global coordinators, on behalf of the underwriters, a 30-day over-allotment option to purchase up to about 11.6 million additional shares in NN Group at the offer price.

The over-allotment option can be exercised until 30 days after the first trading date. If this option is fully exercised, ING's ownership in NN Group will be further reduced to 68.1 percent.

ING plans to cut its stake in NN Group to below 50 percent before December 31, 2015 and sell the remaining shares before December 31, 2016, in line with the timeline it has agreed with the European Commission.

The offering, upon completion and excluding the over-allotment option, will have an estimated negative impact of about 3.4 billion euros on the shareholders' equity of ING Group, which will be recorded in the company's third-quarter results.

J.P. Morgan, Morgan Stanley, ING Bank and Deutsche Bank are acting as joint global co-ordinators for the IPO. BNP Paribas, Citigroup, Commerzbank, Credit Suisse and Nomura as well as the joint global coordinators are acting as the joint bookrunners for the IPO.

ING closed Tuesday's trading at $14.29, up $0.27 or 1.93 percent on a volume of 1.12 million shares.