ABN Amro valued at up to 18.8 billion euros as float price set: Reuters

The Dutch government announced a wide price range on Tuesday for ABN Amro‘s (IPO-ABN.AS) return to private hands, valuing the lender at 15-18.8 billion euros ($16-20 bln) in what is set to be Europe’s biggest bank floatation since the financial crisis.

ABN’s listing on Nov. 20 is a milestone that comes as the Dutch economy finally recovers from the crisis and as the government tries to move past ABN’s costly nationalization in 2008.

Finance Minister Jeroen Dijsselbloem, who gave final approval to sell a 23 percent stake in the bank, conceded that taxpayers are unlikely to recover the 22 billion euro cost of its bailout.

“There was a much larger price tag on the rescue of ABN Amro,” Dijsselbloem said in Brussels. “We’re just going to try to sell it for the best possible return.”

He has previously said that the government’s ownership of the bank was a temporary measure and it would sell the rest of its stake in coming years.

On offer in the IPO are 188 million depository certificates representing shares at 16-20 euros each, in line with bankers’ estimates, and meaning the state will raise 3.01-3.76 billion euros.

Corne van Zeijl, a portfolio manager at Actiam who is considering investing in the IPO, said the government had taken a conservative approach, opting nearer to the bottom of an initial 20-30 percent range.

Banking sector “prices have come down, and it’s pretty late in the season,” he said, adding that he thought there would still be solid interest.

ABN was a major international player before it was carved up as part of a failed 71 billion euro ($76 bln) hostile takeover by Royal Bank of Scotland (RBS.L), Santander (SAN.MC) and the now defunct Fortis that was nominally the largest ever in the banking industry.

It became a symbol of market failures in the Netherlands when its Dutch rump had to be rescued to avoid a crippling bankruptcy of a systemic bank.

ABN has been restructured and refocused on the Dutch market under Chief Executive Gerrit Zalm, who is promoting the bank as a conservative investment with limited growth potential but good returns.

The new ABN makes 80 percent of its profit in the Netherlands, where it competes with ING (ING.AS) and Rabobank [RABO.UL].

On Monday, it reported third-quarter earnings of 509 million euros, up 13 percent from a year earlier, as bad loans fell.

Zalm called the listing a “logical step, following the progress we’ve made since ABN Amro was set up in its current form.”

At the mid-point of the valuation range, 16.9 billion euros ($18.2bn), ABN would rank as Europe’s 26th biggest listed bank in terms of market capitalization, slightly smaller than Belgium’s KBC (KBC.BR), Spain’s Caixabank (CABK.MC) and UK-listed Standard Chartered (STAN.L).

The IPO was delayed in March due to a public outcry after the bank attempted to boost managers’ base pay to compensate for a law capping financial sector bonuses at 20 percent of salary.

Mindful of ABN’s 2007 dissection, Dijsselbloem has outfitted ABN with protective measures.

The government is selling depositary certificates in the IPO as the actual shares are held by an independent institute with the power to block a takeover.