Bank sets IPO price range

In going public, East West officials expect to raise up to P5.76B

By: Doris C. Dumlao, April 10th, 2012 11:11 PM

Gotianun-led East West Bank has set a price range of P18.50 to P23.50 for its initial public offering, which will bring about a fourth of the bank’s ownership in public hands and raise fresh funds for expansion and its bid to become one of the country’s major banks.

The bank plans to sell 245.32 million common shares plus 36.8 million in “optional” shares. This brings the base IPO size at P4.5 billion to P5.76 billion ($134M). Including the over-allotment option, the equity deal can increase to a range of P5.22 billion to P6.63 billion.

Apart from raising fresh funds for expansion, East West Bank chair Jonathan Gotianun said its stock debut meant the bank was “prepared to subject itself to higher standards of corporate governance.”

Being a publicly listed company, Gotianun said, would also give East West a “new currency” to fund potential merger and acquisitions in the future.

In the last decade, East West Bank has had three acquisitions—Ecology Bank (2003), AIG Philam Savings Bank (2009) and Green Bank (2011).

“We have put in place all the ingredients to become among the country’s largest banks,” Gotianun told investors.

“We have the momentum, track record and we believe we have a very good team to execute … The Philippine economy, the operating environment is also favorable for growth and we don’t see anything that will conceivably change that,” Gotianun said.

For 2012, East West Bank plans to expand its loan portfolio by 20-25 percent.

The bank’s domestic offering will run from April 20 to 26 while listing will be on May 7.  The final IPO price will be set on April 18.

East West Bank will be the first bank to debut on the PSE in eight years.  About 70 percent of its offering is earmarked for offshore investors.

The bank’s international lead managers for this IPO are Deutsche Bank AG and J.P. Morgan Securities while Unicapital Inc. is the local arranger.

The bank intends to use the net proceeds from the primary offer for the payment of bank branch licenses, the expansion of the branch network and implementation of IT infrastructure, and for general corporate purposes.

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