Bank of Tokyo-Mitsubishi buys 20% of Security Bank for P37B
SECURITY Bank has taken in Japanese banking giant Bank of Tokyo-Mitsubishi UFJ as a strategic partner with a 20 percent stake, resulting in fresh capital infusion of P36.9 billion for the local bank.
The core banking unit of Mitsubishi UFJ Financial Group (MUFG) signed on Thursday a deal to buy 150.7 million newly issued common shares of Security Bank at P245 per share, marking a hefty premium over Wednesday’s closing price of P135 per share.
The Japanese group is also buying 200 million preferred shares at P0.10 per share, bank officials announced in a press briefing on Thursday.
The deal was priced at 2.8 times Security Bank’s book value as of end-September 2015.
The P36.9-billion transaction is expected to be completed within the first half of 2016, subject to regulatory approval in the Philippines and condition precedents. Once completed, the transaction will be the largest equity investment in a Philippine financial institution by a foreign investor.
The deal will increase Security Bank’s shareholder capital from P52.4 billion as of September 2015 to P89.3 billion on a pro-forma post-transaction basis.
“We are elated to have BTMU as a strategic shareholder and business partner. The transaction will position Security Bank as a large independent bank supporting the growth of the Philippine economy,” said Security Bank chair Alberto Villarosa.
“The additional capital will help us execute faster and with more scale our strategy to build our retail banking business as a third business pillar alongside Wholesale Banking and Financial Markets. It will allow us to accelerate the expansion of our branch network to support retail market penetration as well as make inroads into the Japanese business sector,” said Alfonso Salcedo Jr., president of Security Bank.
Security Bank’s shares rose by 6.67 percent to close at P144 per share on Thursday after the deal was announced.
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