The Ministry of Economy and Finance has put 252 million shares up for sale at a price of 2.89 euros per share, with a discount of about 6% compared to the close of the stock market (3.07 euros). If confirmed, the price would bring in the Treasury about 728 million euros. This is what emerges from the letter of intent of the placement, which also provides for a period of 90 days for the ministry to examine it.
The accelerated book building procedure was chosen and activated through a consortium of banks consisting 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 the aforementioned shares with qualified investors in Italy and foreign institutional investors". As part of the transaction, the note continues, "it is envisaged that the MEF will undertake 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 and Joint Bookrunners themselves and except for exemptions, as per market practice". Finally, the Ministry explains that "the final terms of the transaction will be communicated at the end of the placement".What does the ABB procedure consist of?
A procedure that makes it possible to sell particularly significant company shares 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 shares to be sold in one, maximum two days, and without the need for any advertising operation, as is the case with IPOs. Another advantage is the placement to institutional investors and not directly on the market, which may not be able to absorb too many shares in a short period of time. Buyers usually have a discount to the market price, and this often has a short-term effect on the market of reducing the value of the shares. The procedure, in Italy, was used for Terna, Banca Generali and Tod's. For Terna, Romano Minozzi sold 2013.5% of the shares in two days in 3, at a discount of 4.62%. Also in 2013, Assicurazioni Generali sold a stake of approximately 12% of Banca Generali in one day (at a discount of 7.13%). The Della Valle family sold 10% of Tod's in December 2010 (a reduction of 9.53%)