Asia United Bank IPO priced at P95 a share

Firm says offering 5 times oversubscribed

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Asia United Bank, owned by the Ng family behind snack food maker Rebisco Biscuit Corp., has priced its initial public offering (IPO) at the middle of the initial range, resulting in heavy oversubscription for the biggest component of the P8.36-billion issue.

 

Lauro Baja III, managing director at UBS Philippines, said the company’s shares were priced at P95 each following an international roadshow this week in Hong Kong, Singapore and London.

 

Baja said in a text message that the deal received a boost Thursday after Standard & Poor’s raised the country’s debt rating to investment grade, the second such action by a ratings agency. Fitch Ratings was the first to raise the country’s debt rating to investment grade in March.

 

AUB is offering about a quarter of its capital to the public, or up to 80 million shares as part of the base offering and an additional eight million shares under an over-allotment or “greenshoe” option.

 

Going public is a requirement as the commercial lender, ranked 20th among 37 operating large banks in the country, recently received regulatory approval to expand into a universal bank. The money raised will be used to increase its branch network as well as investments to improve its IT infrastructure.

 

At the current price, investor orders for the international component of the IPO far exceeded available demand, resulting in an oversubscription of five times, Baja said.

 

As with previous deals coming out of the Philippines, Asia-based investors accounted for 75 percent of the take-up with 25 percent coming from Europe, he noted.

 

AUB’s shares were marketed at a range of P80 to P110 a share. Baja noted that investor orders covered the price range “but the issuer [AUB] wanted to ensure after-market support”.

 

UBS was sole global coordinator and joint bookrunner. Credit Suisse was joint bookrunner. The local offer, meanwhile, will run from May 7 to May 14.

 

AUB, whose first day of trading is targeted on May 17, is the second IPO in the Philippines this year after Philippine Business Bank, led by Zest-O owner Alfredo Yao, raised P3.19 billion in February.

 

 

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