The council of Coop Pank approved an initial public offering of the bank of 37.9 million euros at the price of 1.15 euros per share. In total, during the IPO, some 11,000 investors subscribed to almost 33 million shares of Coop Pank. According to the plan, exchange trading will begin on December 9.
10,855 investors participated in the retail offer, having subscribed to a total of 27 million shares. On average, one investor subscribed to approximately 2,500 shares. The institutional offer attracted 24 investors, who subscribed to over 6 million shares.
As a result of the subscription, 71% of the original maximum planned IPO volume of 46 million shares was achieved. The subscription of retail investors exceeded expectations, while the subscription volume of institutional investors was more modest than initially anticipated.
The council of Coop Pank decided that all subscribers will receive the shares in the desired amount. Coop Pank issues 27 million new shares, and its equity is to increase by 31 million euros. This sum will be used to implement the bank’s growth strategy.
The share price was 1.15 euros, which is the lower offer limit. The reserved amount of 0.15 cents per share was released for the investors who subscribed at the rate of 1.3 euros.
The current minority shareholders of AS Inbank, Luciano Orsero and Roberto de Silvestri sell the total of ca. 5.8 million shares. The largest private shareholder of Coop Pank, Andres Sonn, decided to not to sell his shares during the IPO.
Most investors (50%) used LHV to subscribe for shares. 31% of investors subscribed for shares using Swedbank, and 18% using SEB. In other Baltic countries, 74 investors subscribed for shares, expressing their wish to purchase 457 thousand shares.
Margus Rink, chairman of the management board of Coop Pank:
“The offer has shown that retail investors have great confidence in us. On behalf of Coop Pank employees, I guarantee that we will make every effort to fulfill the promises given to shareholders and in the coming years will fully implement the 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. We are especially pleased that 24% of the subscribers to our shares were Coop Pank customers, who subscribed for a total of 42% of the IPO volume. Coop cooperatives also subscribed to 1.4 million shares.”
Lauri Lind, representative of LHV, the financial advisor for the IPO:
“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. 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. 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.”
Coop Pank shares will be transferred to securities accounts of investors, presumably on December 4, 2019. According to the plan, the first day of trading of the shares on the Nasdaq Tallinn Stock Exchange is December 9, 2019.
Coop Pank, based on Estonian capital, is one of the five universal banks operating in Estonia. It has 15 branch offices and 28 banking points all over the country. The number of clients using Coop Pank for their daily banking reached 58,300. Coop Pank aims to put the synergy generated by the interaction of Coop retail business and banking to good use and to bring everyday banking services closer to people’s homes. The strategic shareholder of the bank is the domestic retail chain Coop Eesti comprising 330 stores and having ca. 600,000 loyal customers.