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Battle of the cajas' IPOs » - Business and political news about Spain

Spanish saving banks Bankia and Banca Civica launched simultaneous initial public offerings last week, exacerbating concerns that the similar timing could damage the crucial deals chances of success.

The price range for Bankia put target proceeds at 3.63-4.16 billion euros on the base deal with a price to book ratio of 0.46-0.51 times, versus a far smaller total of 600-844 million euros for Banca Civica, which is seeking a valuation of 0.40-0.525 times its book value.

As a reference point, CaixaBank , the far larger restructured La Caixa, began trading as a new entity last Friday at 0.87 times book value.

Bankers both involved and observing the two deals have been speculating on where they might price relative to book value in the build up to the IPOs, in particular on Bankia . Early pre-marketing feedback from investors slapped down a potential valuation of 0.6 times book, while another had suggested pricing nearer 0.5 times and possibly lower was a more feasible bottom of the range.

Much of that early feedback appears to have been taken on board.

For Bankia, it is also a remarkably tight range of 10.9 percent compared with Banca Civica which is around 31.25 percent. The suggestion is that this is a function of Bankia needing to raise a larger and more specific amount of capital while also keeping dilution on tight leash.

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