We are pleased to report that STJ Advisors advised ISFI (Icelandic State Financial Investments) on its sale of shares in Íslandsbanki hf, one of Iceland’s leading banks, via an accelerated bookbuilt offering. This transaction represents our second consecutive mandate as advisors to ISFI in a placement of Íslandsbanki shares after the $457m IPO completed in June 2021.
The transaction raised gross proceeds of $408m via the sale of 450 million ordinary shares, representing 22.5% of the ordinary share capital. ISFI’s stake in Íslandsbanki following the transaction will be 42.5%.
Following a limited wallcrossing exercise involving a mix of international and domestic accounts, the transaction was launched on the basis of an offering of at least 20% of the issued share capital, increased from 15% on the back of the wall cross feedback, and a books covered from wall-crossing indications message. On the back of very strong demand, the deal size was increased to 22.5% of the issued share capital, resulting in an increase of almost 65% of the free float. Pricing was set at a very tight 4.1% discount to closing price, compared to a market average discount of 6.4% for European Secondary ABBs in 2022 and 8.7% since the invasion of Ukraine caused market volatility to increase dramatically. This was the largest relative size offering completed in 2022, representing 304 days’ trading volume (ADTV) vs. the European market average of 39 days. The offering was successfully completed during very challenging markets, where European ABB activity is down 78% YTD.
The final book consisted of over 430 lines at the offer price, was multiple times oversubscribed at the offer price with a strong skew to long-only investors. Many IPO investors participated in the transaction, reinforcing the strong operating performance of Íslandsbanki since IPO.
STJ provided critical advice around timing, bank selection and syndicate structure and fees, sizing and ultimate pricing and allocation tactics to achieve an optimal transaction (in terms of both size and price) for ISFI. Since the IPO in June 2021, the share price has seen a 54% increase. The transaction is the largest secondary ABB offering in Icelandic history.