Estonian bank Coop Pank raised €37.9mn in an IPO on the Nasdaq Tallinn Stock Exchange, selling 71% of the 46mn shares that made up the maximum planned volume of the offering.
A total of almost 11,000 investors subscribed to just under 33mn of the bank's shares, it said in a press release on December 2. The shares were offered at €1.15 per share.
According to the bank, subscriptions by retail investors exceeded expectations, but this failed to make up for the lower than expected subscription volume among institutional investors.
All subscribers will receive the desired amount of shares, the bank has decided. Coop Pank is issuing 27mn new shares, and its equity is to increase by €31mn, which will be used to implement its growth strategy.
“Initially, we planned to raise during the IPO the sum that would satisfy the need for capital for three upcoming years, but in fact, we managed to raise the capital needed for two years. Now we are making the decisions on raising additional capital,” said Margus Rink, chairman of the management board of Coop Pank, in a statement.
According to the bank, 10,855 investors took part in the retail offer, subscribing to 27mn shares. The institutional offer attracted 24 investors, who subscribed to over 6mn shares.
“The results of the institutional proposal were negatively affected by several factors. The volume of the offer, as well as the size of the company itself, seemed to many as aimed at a specific region and were too small for the investment funds of emerging markets, as well as seemingly not providing enough liquidity. Throughout the offer period, there also was a negative news background on the subject of money laundering in the banking sector of the Baltic states,” commented Lauri Lind, representative of LHV, the financial advisor for the IPO.
“The IPO was also influenced by the fact that over the past five years – and in many cases longer – the shares of banks in both the Western as well as Central and Eastern European regions have been trading at almost the lowest level. The reform of the Estonian pension system and the resulting uncertainty also played their role,” Lind added.
“At the same time, the retail offer showed good results, which demonstrates that local investors – including Coop Pank customers – have great confidence in the bank.” The bank will start trading on the Nasdaq Tallinn Stock Exchange on December 9.