MADRID (Reuters) - Spain’s government has started to sell some of its shares in nationalized lender Bankia (BKIA.MC) with an initial offer to investors of a 7.5 percent stake, investment bank UBS said in a statement on Thursday.
Bankia shares closed on Thursday at 1.58 euros per share - up 29 percent so far this year and implying a valuation of 1.365 billion euros for the stake.
A source close to the transaction said investor demand was strong for the Bankia shares and the deal would likely price in line with other similar recent European offers that saw narrow discounts.
Bankia was Spain’s biggest bailed-out bank, at the height of a deep financial crisis that almost sent the country into default. New private investment in the lender will help cement Spain’s turnaround after a prolonged recession.
The government owns 68 percent of Bankia and plans to sell off small stakes this year, but no more than a total of around 18 percent because it wants to maintain control for the time being.
“This is truly a sign of the shift in perception and of the reality of our financial system,” Economy Minister Luis de Guindos said on Thursday referring to the sale process.
A long building and housing boom collapsed in 2008, dragging down a number of Spanish banks that were highly exposed to the sector. The country’s surviving banks have had to recognize steep losses and move sour assets into a so-called bad bank set up by the government.
Bankia took 18 billion euros out of a 41 billion-euro European-financed rescue of Spain’s financial system, and returned to profit last year after a record loss of 19.2 billion euros in 2012.
The stake sale was expected to price by Friday morning.
Deutsche Bank, Morgan Stanley and UBS are handling the process of the 7.5 percent stake sale which is being conducted through an accelerated bookbuilding process, the UBS statement said. Goldman Sachs is advising Spain’s bank rescue fund FROB on the sale while Rothschild is advising Bankia parent company BFA.
Reporting by Jesus Aguado and Fiona Ortiz; Editing by Greg Mahlich and David Evans