A logo at a branch of Virgin Money bank is
seen in the City of London March 6, 2013. Virgin Money bought troubled
British bank Northern Rock in 2012 for 747 million GBP.
Credit: Reuters/Toby Melville
European initial public offerings have raised $60.1 billion so far this year, more than double the amount notched up in the same period in 2013, as firms seized on investor optimism in the early months of 2014 after several years of drought.
The sale on Thursday -- likely to be the last major European listing this year -- valued the business at 1.25 billion pounds($1.97 billion). Virgin Money will raise 150 million pounds.
The shares, priced at the lower end of their indicated range, were trading up 2 percent at 1054 GMT.
Virgin's founder Richard Branson and fellow backer Wilbur Ross, a U.S. financier, are expected to make about 70 million pounds each from the
listing, according to sources familiar with the sale.
Branson's stake in the business is expected to fall to 34.1 percent stake from 46.4 percent previously. Ross's shareholding will drop to 32.5 percent from 44.7 percent.
Among new investors are fund manager Henderson (HGGH.L), which has taken a 3.4 percent stake.
Euphoria struck markets in the first half of 2014, but was dented in October by concerns over weak global market growth, forcing listings to be delayed or scrapped, including the planned debut for rival UK lender Aldermore.
Virgin Money had itself postponed plans to list in October, about a fortnight after it announced its intention to float.
Markets have calmed since and Aldermore's Chief Executive Phillip Monks said this week the bank will revive its planned listing and will be able to "move very quickly".
Virgin's price puts it at roughly 1.2 times the value of Virgin Money's assets. That compares favourably with rival TSB (TSB.L), which is trading at 0.85 times its book value following a flotation in June.
A so-called "challenger" bank, Virgin Money is one of a number of new British lenders looking to break the dominance of the country's 'Big Four' banks, which account for more than three quarters of lending.
"We’ve got very significant future growth opportunities across retail banking and none of the drag that is difficult for some of our competitors," Chief Executive Jayne-Anne Gadhia said.
BoA Merrill Lynch (BAC.N) and Goldman Sachs (GS.N) led the sale. Barclays (BARC.L) and Citi (C.N) were joint bookrunners.
($1 = 0.6340 British pound)
(Editing by Clara Ferreira Marques)
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