Union Bank rights offer priced at 22% discount

Aboitiz-led Union Bank of the Philippines has finalized a P10-billion capital call by pricing a new share sale offering to existing investors at P62.97 a share.

The final price of the stock rights offering marked a discount of 22 percent from the closing price on Tuesday, the last trading session before the equity deal was priced.

The entitlement ratio was set at one rights share for every 6.6644 existing common share, the bank disclosed to the Philippine Stock Exchange on Wednesday.

The offer price was determined based on the 15-day volume-weighted average price of the bank’s common shares traded on the exchange, subject to a discount of 25 percent, the disclosure said.

Shares of Union Bank fell by 2.35 percent to close at P78.90 a share on Wednesday after the pricing of the rights offer was announced. This gave the bank a market capitalization of P98.34 billion.

The bank is set to issue 158.8 million new common shares to eligible shareholders as of record date Sept. 3. The stock rights offering will run from Sept.10 to 21 this year.

Investment house Amalgamated Investment Bancorporation acts as bookrunners and underwriter for the offering while Citigroup Global Markets Ltd. is the sole global coordinator, joint bookrunner and international lead manager.

Proceeds from the offering will be used by the bank to fuel asset expansion and boost its capital adequacy ratios.

Union Bank plans to launch more innovations in the industry as it aims to be among the pioneers in the field of blockchain technology and the token economy.

The bank grew its first semester net profit by 8 percent year-on-year to P4.7 billion as higher interest earnings made up for the slack in securities trading and fee-based businesses. It expects business to pick up pace this second semester, allowing the bank to meet its goal of growing net profit this year at a double-digit pace.

The bank grew its loan book by 18 percent year-on-year to P313 billion as of end-June, with retail loans accounting for 33 percent of total loan portfolio. This increase in earning assets boosted total resources by 12.8 percent year-on-year to P623.2 billion.

Union Bank’s six-month performance translated to an annualized return on equity and return on average assets of 12.8 percent and 1.6 percent, respectively. —DORIS DUMLAO-ABADILLA