Clydesdale retains “strong confidence” in IPO plans despite negative reports

The voices coming from the Clydesdale, which has become a toxic debt-ridden and scandal-hit milestone around the neck of NAB which has owned it since 1987, have been reacting to reports this week that Bank of America Merrill Lynch, Morgan Stanley and Macquarie, who are advisers on the float, have not been encouraged following meetings with investors in London, Edinburgh and New York.

Some reports have claimed that responses have included the assertion that the undisclosed price being sought for the shares is too high.

However, the Scotsman newspaper has reported that one source within the Clydesdale said the outcome of the meetings had given cause for “strong confidence” and that “the business is well-placed to complete the demerger and IPO process by the planned target date of late 2015, early 2016, subject to market conditions.”

A formal price range for the shares at flotation has yet to be set, but new Clydesdale chief executive David Duffy has been reported as saying that a potential valuation of 0.7 times the bank’s book value had been discussed with fund managers and the reaction had not been negative.

Updating the market on the bank’s third-quarter trading performance earlier this month, Andrew Thorburn, chief executive of NAB, said the British subsidiary had made “substantial progress” towards its flotation.

Meanwhile, Mr Duffy, who is also the boss of Clydesdale’s sister British bank, Yorkshire Bank, has been reported this week as saying: “If I look at the flotation of this bank it is in a better position than the majority of others I have seen in the market.”

NAB is planning to sell up to 30 per cent of its UK business to institutional investors before the end of this year with the remainder held by the Australian group’s shareholders.