Shareholders of Co-operative Bank, the UK financial institution rescued by hedge funds in a recapitalization in 2013, will this month be able to trade shares for the first time since then in an auction via Asset Match, an online marketplace for unquoted shares.
The auction will run on September 10-17, setting a price for the shares and allowing shareholders representing almost 80 percent of the bank’s issued share capital to trade shares, Asset Match says in a press release announcing the auction.
‘We have been contacted by a number of private client shareholders asking us whether we can assist, and the fact that the Co-operative Bank’s shares are both freely transferable and CREST-enabled make an auction possible,’ says Iain Baillie, Asset Match co-CEO, in the release. ‘With the bank’s expected IPO on hold until its turnaround is further advanced, we are pleased Asset Match will be able to provide a solution to shareholder liquidity while the bank remains private.’
Co-operative Bank shareholders have been locked into their holdings since the 2013 rescue, which converted bonds of junior bondholders to shares and cut the stake in the bank owned by Co-operative Group from 100 percent to 30 percent.
Shareholders must register their holdings on the Asset Match website, and then place buy and sell limit orders when the auction starts. At the end of the auction, Asset Match says, a non-discretionary algorithm will determine the final auction price and the number of shares that will trade. It also says shareholders can monitor the auction and adjust their bids and offers throughout the auction period.
‘The auction process and the algorithm that calculates the closing price [constitute] a fantastic way to reintroduce some visible liquidity,’ Baillie says. ‘By creating an event, we are bringing investors together so they can buy and sell shares in a fair and transparent way.’
