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ABN AMRO IPO shares around 40% undervalued and here's why

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From bail out to billions in a fresh IPO, shares in the Dutch bank ABN AMRO are due to go on sale this week. The government of the Netherlands is selling off a 23% stake in the bank which it saved during the financial crisis seven years ago.

Saxo Bank's Head of Equity Strategy Peter Garnry has been analysing the bank's recent performance and comparing with more than thirty other European banks. He argues that the shares, based on the mid-price of the expected offering, will be around 40% undervalued.
      
The IPO values the bank at around EUR 17 billion with shares expected to be priced at between EUR 16 and EUR 20, and Peter explains why he is positive on the pricing up to EUR 25.