Arion Bank announces Hagar IPO on NASDAQ OMX Iceland - bank to sell its holding in public offer
The board of directors of Arion Bank has decided to float retail company Hagar on NASDAQ OMX Iceland in cooperation with Hagar and to sell the bank’s holding in the company. Shares in the company will be offered for sale to the general public and institutional investors. The current management of Hagar will be offered 15% (10% to Jóhannes Jónsson, executive chairman of Hagar, and 5% to the remaining management) at the same price as other investors.
This arrangement serves the interests of the bank, the customers and the employees of Hagar. A stock market listing will put the company into an open and transparent sales process, ensuring that it has a diverse shareholder base and that the company will be subject to mandatory requirements on disclosure. A detailed prospectus, which requires stock exchange approval, and a due diligence review performed by an independent party should ensure there is no discrimination between investors. International advisors will be brought in to advise on the offering.
Arion Bank acquired its holding in Hagar when it took over the holding company 1998, which had a 95.7% share in the company. The bank’s objective in resolving Hagar’s debt problems was and is to maximize the recovery of the loan portfolio and to safeguard Hagar’s future operation. It was therefore of paramount importance for the bank to deal with this issue with the utmost care and to take the time to necessary to assess every available option.
Hagar is a well run company, operating a number of well known stores and employing a highly experienced and proficient workforce. Arion Bank’s decision has been taken in collaboration with the current management of Hagar who support the flotation of the company on NASDAQ OMX Iceland.
A new five-member board of directors will be appointed at Hagar, comprising the following people: Guðbrandur Sigurðsson, Erna Gísladóttir, Steinn Logi Björnsson, Svana Helen Björnsdóttir and Jóhannes Jónsson, the founder of Bónus, who will continue to be executive director of Hagar.
Arion Bank has already begun preparing the listing and the sale of Hagar. If everything goes according to schedule, the process is expected to be completed by mid 2010. The terms of the listing and the offering will be announced in more detail once NASDAQ OMX Iceland has given its approval. The board of directors of Arion Bank believes that floating Hagar will inject new life into the Icelandic stock market.
“I am pleased with this solution,” said Finnur Sveinbjörnsson, CEO, when the decision of Arion Bank’s board of directors was announced. “Hagar is a robust company which plays an important role in the retail business throughout Iceland. The bank has prepared this case meticulously and strictly adhered to its rules of procedure. Although this issue has at times divided public opinion, I believe that the current solution underlines the value of the bank's rules of procedure and working methods.