NAB announces terms of Clydesdale demerger and IPO

NAB’s intention is to pursue a demerger of 75% of CYBG to NAB shareholders and proposed divestment of the remaining 25% by IPO to institutional investors.

If the demerger is implemented, shareholders will retain their existing NAB shares and eligible NAB shareholders will receive one CYBG share for every four NAB shares they hold.

The demerger remains conditional on court, shareholder and final regulatory approvals, but is expected to complete in early February.

CYBG is expected to have a primary listing on the London Stock Exchange and the Australian Securities Exchange.

NAB Chairman, Michael Chaney, said:

“Having assessed a number of alternatives, the NAB Board considers the demerger (in conjunction with the opportunity to undertake the IPO) is the best exit option and is likely to enhance value for NAB shareholders over the long term.

“In recent years, NAB has taken a number of steps and initiatives to strengthen CYBG’s standalone position. The NAB directors are of the view that CYBG is now in a position to be demerged to NAB shareholders and be listed as a standalone retail and SME bank with a strong franchise across its core regional UK markets, a strong balance sheet and capital position, a robust business plan and operating platform, as well as an experienced management team.

“The demerger provides eligible shareholders with separate investments in NAB and CYBG and if they choose to retain their CYBG securities, the ability to benefit from any improvement in the UK economy and CYBG’s strategy and performance going forward."

NAB Group CEO, Andrew Thorburn, added:

“Following the demerger, NAB is likely to benefit through a combination of improved return on equity and capital generation given the higher profitability and returns currently generated from NAB’s core Australia and New Zealand businesses."