Convincing investors to buy shares in a restructured Spanish savings bank sounds a daunting task when it’s attempted in a European sovereign debt crisis and amid an overhaul of the troubled domestic banking system given added urgency by five Spanish banks failing the European Banking Authority’s stress tests. Yet that is exactly what newly created Bankia, a merger of seven Spanish banks, and its lead arrangers achieved last month.
"The most important thing is that we did it," says a banker who worked closely on the IPO. "Everyone in Europe is talking about what a success it was," he says, "because it was done in such a difficult environment." The transaction raised about €3.1 billion in capital, excluding the green shoe, making it the third-largest IPO in Spanish history.
ECM bankers outside the deal speculate that all manner of pressure must have been put on Spanish institutions to support it.
How do those who worked on the deal say it got done? "The story is simple," says the source. "It’s just a matter of making investors believe three key points."
The deal was cheap. Priced at €3.75, Bankia shares sold for 0.4