Top Nordea Investor Sells $1.7 Billion Stake on Road to Exit

The biggest shareholder in Nordea Bank Abp offloaded another chunk of its stake as it moves ahead with a planned exit from the Nordic region’s largest bank.

Sampo Oyj sold 162 million shares in Nordea to institutional investors for 8.50 euros each, equivalent to 4% of the bank, reducing its holding to 11.9%, it said on Wednesday. The sale brought in gross proceeds of almost 1.4 billion euros ($1.7 billion).

The divestment has been on the cards since November, though Sampo only made clear last week it was intending to sell the entire holding, due in part to a Finnish tax quirk. As a result, Sampo will offload all its shares in the bank within 12 months of its stake dropping below 10%.

Sampo has faced pressure from activist investor Elliott Management Corp., which said earlier this year the Finnish insurer could free up as much as $10 billion in shareholder value by disposing of the Nordea stake. According to analysts at Citi, Sampo may well divest the entire holding later this year, while analysts at Morgan Stanley suggest the firm might use proceeds from the latest sale to cut debt or even return capital to investors.

Nordea’s Biggest Shareholder Says It’s Planning Total Exit

Sampo has said it plans to focus on property and casualty insurance, after admitting it underestimated how profitability in the bank sector would be burdened by long-term ultra-low interest rates. It also pointed to regulatory pressures as a factor that has weighed on bank stocks.

The firm has agreed not to sell more Nordea shares before Aug. 23. The bank’s shareholders gave it permission to buy back more than 12% of its stock, and Chief Executive Officer Frank Vang-Jensen has said he’s ready to start the purchases when cleared by Nordea’s regulator, the European Central Bank.

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