Category Archives: $TSB

@WhereKitWan: TSB IPO Prospectus out here…. should you apply?

Prospectus available here:
https://www.hl.co.uk/tsb/share-offer-updates

2 important numbers in the prospectus: Net Assets=1.4bn and Profit=60m.
Pricing range = 220 to 290 (500k shares) valuing the company between 1.1bn and 1.4bn – so between 0.8 and 1x book value.

See headlines stating that the pricing values the company ‘below book value’ – but this does not necessarily mean it is cheap – Barclays is trading 0.8 times Net Tangible Book.
Not sure The Profit number is that useful, as you really need EPS forecasts in years further out to get an idea of the value of the company (2CentView model is based on this).

Note: The recent OneSavings IPO opened at 4% premium to IPO price, so not a windfall! And, There are more ‘challenger banks’ coming.

So the bottom line, 2CentView is that the deal should be priced in the 220-250 area, in order to have a chance of making profits on the first day of trading, but only expect a premium of 10-20% on the first day.

So no free champagne lunch like we got with Royal Mail!