NN Group: Forced Sale Of A Leading Insurance Company: 60+% Upside; Minimal Downside
- ING Groep is a forced seller of NN Group to meet European regulatory deadlines; extracting the best market price was not the primary criteria for the sale.
- IPO timed when many US and European buyers are on summer vacation. Demand by US investors further curtailed due to short trading week prior to July 4th.
- NN Group is a high quality business with a leading market share in countries in Western Europe, Eastern Europe and in Japan and Turkey.
- Shareholder friendly management: 6.3% dividend yield. Further capital return expected after completing ongoing restructuring of the business to free up excess capital.
- 60+% upside. Minimal downside: price to tangible book of 0.57; price to estimated 2014 earnings ratio of 9.3; free cash flow yield of 6.1%, dividend yield of 6.3%.