The Ministry of Economy and Finance announces that it has started an accelerated order collection procedure for the sale of n. 251,937,942 ordinary shares of Banca Monte dei Paschi di Siena, corresponding to approximately 20% of the Bank’s share capital. We read it in a note from the Ministry.
The operation is based on a price guidance of 2.89 euros per share, with a discount of approximately 6% compared to the stock market closing (3.07 euros). If confirmed, the price would lead the Treasury to collect approximately 728 million euros. This is what emerges from the placement term sheet, which also provides for a lock-up period for the Treasury of 90 days.
The start of the accelerated order collection procedure, called ‘Accelerated Book Building’ (Abb), we read in the note, is done «through a consortium of banks made up of BofA Securities Europe SA, Jefferies GmbH and UBS Europe SE as Joint Global Coordinators and Joint Bookrunners, with the aim of promoting the placement of shares with qualified investors in Italy and foreign institutional investors”.
«As part of the operation – continues the note – it is envisaged that the Mef undertakes with the Joint Global Coordinators and Joint Bookrunners not to sell further shares of the Bank on the market for a period of 90 days without the consent of the Joint Global Coordinators themselves and Joint Bookrunners and subject to exemptions, as per market practice”.
What is Accelerated Bookbuilding (Abb)
A procedure that allows particularly significant company shares to be sold in bulk in an accelerated manner to institutional investors. These are the characteristics of Accelerated Bookbuilding (Abb), the procedure chosen by the Ministry of Economy to put 20% of Monte dei Paschi di Siena on the market. One of the advantages is precisely the speed, which allows the shares to be sold in one, maximum two days, and without the need for any advertising operation, as happens with IPOs. Another advantage is the placement to institutional investors and not directly on the market, which may not be able to absorb too large a quantity of shares in a short period of time. For those who buy there is usually a discount compared to the market price and this, on the market, often has a short-term effect of reducing the value of the shares. In Italy, the procedure was used for Terna, Banca Generali and Tod’s. For Terna, Romano Minozzi sold 5.3% of the shares in two days in 2013 at a discount of 4.62%. Also in 2013, Assicurazioni Generali sold a share of approximately 12% of Banca Generali in one day (with a discount of 7.13%). The Della Valle family sold 10% of Tod’s with this procedure in December 2010 (with a reduction of 9.53%).