NAB Has Just Priced The Western Bank IPO At Up To $330 Million But It's Lower Than Expectations

Photo: Rahman Roslan / Getty Images.

National Australia Bank has just announced the final pricing for the IPO of its US-based subsidiary Great Western Bank and it looks like it’s lower than expectations.

The offer is made up of 16 million shares or 27.6% of GWB’s outstanding common stock at a price of $US18 per share meaning NAB’s gross proceeds will be about $US288 million. Previously the NAB said it expected shares to be between $US21 to $US24 each.

There is also an option for underwriters to purchase up to an additional 2.4 million GWB shares, which if exercised, takes the total offer to 18.4 million shares or 31.8% of the company and gross proceeds to $US331 million.

NAB Group Chief Executive Officer Andrew Thorburn said this is an important step for the company’s strategy which is to build a stronger Australian and New Zealand presence.

“While the price is lower than expectations the IPO had strong demand despite the recent volatility in the US equities market,” Thorburn said.

The bank announced in August it planned to sell 100% of its GWB stock over time, subject to market conditions.

“Pleasingly the deal attracted strong representation from a broad range of quality investors with the book well covered. We are now on our way towards executing our plan to sell 100% of GWB,” Thorburn said today.

After completion of this offer NAB’s GWB stake will be 72.4% or 68.2% if the underwriters’ option is exercised in full.

GWB’s stock is expected to begin trading on the New York Stock Exchange on 15 October 2014 US time.

The timing of subsequent sales of GWB shares is unknown and is subject to US regulatory restrictions, including an initial 180-day lock-up period.

NAB bought the bank back in 2007 for $US798 million when it was looking to expand its agribusiness focus in the US.

GWB posted a net income of $US77.1 million for the night months to June.

NAB was trading up 0.59% on the ASX to $32.41 a share a short time ago.

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