* Shares priced at 20 euros a piece, in middle of range
* Largest listing in continental Europe since 2011
* Values NN Group at around 7 bln euros
* ING expects gross proceeds of 1.5 bln euros
(Adds analyst comment)
By Anthony Deutsch and Thomas Escritt
AMSTERDAM, July 2 Shares in NN Group,
the insurance arm of Dutch financial services company ING Group,
rose as much as 7 percent on their stock market debut on
Wednesday, in the largest listing in continental Europe for
The flotation was a sign of continued strong demand for
European new share issues this year, following a barren spell in
the wake of the 2008 financial crisis.
It also marked a major step on the path to recovery for ING
Group, which is slimming down to focus on banking to
meet the terms of a 10 billion euro state bailout.
ING priced the shares at 20 euros each late on Tuesday, the
middle of the expected range and valuing NN Group at roughly 7
billion euros ($9.6 billion). The shares rose as high as 21.47
euros early Wednesday, and were at 21.31 euros by 0945 GMT.
"Companies are coming back to the capital markets," Euronext
Amsterdam boss Cees Vermaas said in an interview with Reuters.
He said NN Group was the largest company by market value to
list in continental Europe since 2011 and that it was the sixth
initial public offering (IPO) in Amsterdam this year, with a
cumulative 22 billion euros raised.
ING said it expected the listing to raise about 1.5 billion
euros. It had increased the number of ordinary shares being
listed by 10 percent to 77 million due to "significant" investor
demand. The listing is largest insurance IPO in the European
Union by amount raised since Poland's PZU in 2009.
ING, formerly one of the world's largest banks and insurers,
has sold off tens of billions of dollars in foreign assets,
radically reshaping itself to comply with the terms of its state
rescue, shedding thousands of jobs.
"We remember how we built this company and it's a mixed
emotion," ING Group chief executive Ralph Hamers said at the
Amsterdam stock exchange. "We had to change course. We had to
end one era to start a new one. The listing today is the final
step in turning ING from bancassurer into a bank."
The offering will have an estimated negative impact of
approximately 3.4 billion euros on ING Group's shareholders'
equity, to be booked in the third quarter, it said.
ING's ownership of NN Group will be reduced to 71.4 percent,
excluding the possible exercise of a 15 percent over-allotment
option. It is to sell its remaining stake by 2016.
The bank said it intended to use the net proceeds of the
offering to cut debt.
"NN Group is very attractive at this level, based on
valuation compared to its peers," said Salah Lemer of ESN/SNS
Securities. "They have a good portfolio, balanced with both
mature and emerging markets, and there is positive market
sentiment about financials."
Lemer said NN Group is trading at a discount of 40-50
percent compared to its main rivals, based on price-to-book
value. "All those factors, including a clear dividend policy,
are playing a role today," he said.
Of the shares being offered, approximately 94.8 percent were
allocated to international institutional investors, from Europe,
Asia, the United States and Britain. Around 5.2 percent went to
Dutch retail investors, ING said.
The deal received over 250 orders from investors, with 30
percent getting no allocation, a source close to the deal said.
The top 10 allocations, including anchor investors, received
around 45 percent of stock sold.
The cash raised in European IPOs this year rose almost 250
percent to $41.2 billion through June 30. But there have been
recent signs of cooling as investors become more selective.
Still, shares in Dutch specialty chemicals distributor IMCD
rose nearly 5 percent on their first day of trading
in a 462 million euro flotation in Amsterdam last week.
NN Group, which has a strong position in the Dutch domestic
market, a substantial European presence, operations in Japan and
a global investment management business, said it would pay a
one-off dividend of 175 million euros next year on profits in
the second half of 2014.
ING is due to pay back its final tranche of state aid with a
1.025 billion euro payment in May 2015, a move that could allow
it to resume paying dividends.
($1 = 0.7331 euros)
(Additional Reporting By Freya Berry and Thomas Escritt;
Editing by Andrew Hay, Susan Fenton and Mark Potter)