* Irish government selling 25 percent of state-owned bank
* Sale could raise 3 bln euros, price under 5 euro per share
* AIB CEO not worried about potential impact of UK election
(Adds CEO quotes, details, link to Reuters Breakingviews
By Padraic Halpin
DUBLIN, May 31 Allied Irish Banks is
attracting very significant investor interest as Ireland begins
returning the bank it rescued almost a decade ago to private
ownership, its chief executive said on Wednesday.
One of Ireland's two dominant banks, AIB has been profitable
for each of the last three years and is the largest provider of
mortgages in the fast-recovering Irish economy.
Against this backdrop the Irish government launched its
long-awaited initial public offering of AIB on Tuesday, offering
a 25 percent stake in what is set to be one of Europe's largest
bank listings since the 2008 financial crisis.
Dublin, which rescued the bank in a 21 billion-euro taxpayer
bailout that began almost a decade ago, has been considering
partly cashing out of its 99.9 percent stake for more than a
year and the bank has been meeting investors since then.
"The combination of a strong Irish economy with a growing
European economy as a backdrop and a strong franchise here means
that there is very significant investor appetite," AIB chief
executive Bernard Byrne told national broadcaster RTE.
While a chronic lack of housing could hold lending back,
Byrne said investors see AIB's forecast that the overall Irish
market will almost double to 10 billion euros in the medium term
as an attractive selling point.
Byrne said he anticipated that the stake would be sold to a
wide variety of institutions who would take a long term view.
Irish Finance Minister Noonan declined to say how much
Dublin expected to raise, adding this could "give investors
traction to push the value down" ahead of the publication of a
price range in mid-June
Analysts say it could raise around 3 billion euros, based on
the bank's book value of 11.3 billion euros at the end of last
year and the fact that it has continued to generate capital and
resumed dividend payments since.
Based on the number of shares outstanding, and allowing for
an improvement in the bank's finances in 2017, the price is
likely to come in below 5 euro per share, IFR, a Thomson Reuters
Noonan said the price could be "driven up a little" if
Britain's ruling Conservative party wins a strong majority in a
June 8 election. But a poll published shortly after his comments
showed they could in fact lose their majority.
Byrne sought to play down the risk that the prospect of
political deadlock in Britain could rattle investors.
"The UK market will value bank stocks based on the markets
they operate in, so I think that positive will remain," he said.
Bank of America Merrill Lynch, Davy Stockbrokers and
Deutsche Bank are global coordinators, while
Citigroup, Goldman Sachs, Goodbody Stockbrokers,
JPMorgan and UBS are bookrunners on the IPO.
Their fees are expected to be between 10 and 13 million
euros, a spokesman for the finance department said.
(Editing by Jason Neely and Alexander Smith)