EMEA Secondary Equity Issue: Sampo's €1.84bn sale of Nordea shares

IFR Awards 2022
2 min read
Tom Hill

The final step
Sampo's €1.84bn sale of shares in Nordea was the largest accelerated bookbuild in Europe during 2022, yet the transaction stood out for more than just its size.

There were so few good opportunities to sell in 2022 that in many cases deals never happened and remain on the block for 2023. Sampo had already executed four sales on its way towards the exit and the seller wasn't put off by the VIX hovering around 30 when it came to market in April.

The Finnish insurer was the largest shareholder in the Nordic bank when it sold 4% in November 2020, followed by further sales in 2021 of 4% in May, 1.8% in September and 4% in October.

A couple more trades were planned, with half of the 5.2% stake initially offered in April.

"The original plan was to sell half of this and then slowly, through the wall crossings, there was such momentous demand generated that it enabled us to have this flexibility to sell not US$1bn but US$2bn in one go," said Valery Barrier, co-head of EMEA ECM at Citigroup, which was global coordinator alongside Bank of America.

The wall-crossing exercise came on the day Nordea released first-quarter results and left the original deal of about 100m shares covered on indications. On the back of a rush of demand and investors saying they would increase order sizes if it became a clean-up trade, the leads subsequently increased the deal size to 200m shares and set pricing at €9.20 per share, the bottom of €9.20–€9.30 guidance.

Discounts ranged wildly in 2022, with the Nordea sale one of the tighter trades at just 1.8% below the close. A recurring feature in the year was poor stock performance following ABBs, but the removal of the overhang meant Nordea shares rose 2% the next day to €9.58.

The upsize was also huge at close to US$1bn, all in a market that was precarious considering Russia's recent invasion of Ukraine.

A book of over 100 lines was also notable for its quality with participation from shareholders, financial specialists and other top tier investors and US accounts.

Nordea itself even participated, buying back €368m of its own shares.

“By using the right tactics with the right investors at the right time we create more optionality and more flexibility to the issuer,” said Barrier.

Joint bookrunners were Barclays, Deutsche Bank and Goldman Sachs.

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