UnionBank share sale at P64.81 each
The Aboitiz family’s Union Bank of the Philippines is selling shares at an average discount of 30 percent to raise P40 billion for the takeover of American banking giant Citi’s domestic business.
UnionBank priced its rights offering—a type of share sale reserved for current stockholders—at P64.81 per share, a stock exchange filing showed on Tuesday. This was near the low end of the indicative range of P64.55 to P73.78 per share.
UnionBank said the pricing was based on the average value of shares for the past 15 days, further discounted by 30 percent.
Stockholders could buy one rights share for every 2.47 shares held, the lender added in the filing.
UnionBank shares rose 2.22 percent to P101.50 per share on Tuesday, ahead of the April 6 ex-rights date or the reckoning period for the distribution of rights to shareholders.
Offer terms
Based on the final terms, a total of 617.18 million shares will be offered as part of the fund-raising exercise. The offer size is equivalent to over 28 percent of UnionBank’s outstanding shares after the deal is completed.
The offer period runs from April 25 through May 6 while the shares will be listed on the Philippine Stock Exchange on May 16.
Landmark acquisition
The flagship bank of the Aboitiz family’s power, food and financial conglomerate, Aboitiz Equity Ventures, earlier announced the P55-billion buyout of the Philippine retail and consumer banking businesses of Citigroup Inc.
The acquisition is expected to close in the latter part of 2022. It includes Citi’s domestic credit card, personal loans, wealth management and retail deposit businesses on top of real estate, three full-service bank branches and five wealth centers.
“The bank expects the Citi acquisition to support this strategy through increasing its higher-yielding consumer loan portfolio, net interest margins and overall profitability in the long-run,” UnionBank said in the deal offer prospectus.
The bank earlier disclosed that profits in 2021 had risen 9 percent to P12.6 billion due to higher interest earnings while loan loss provisions fell 31 percent as businesses started to recover during the second year of the pandemic.
UnionBank is also one of a few companies awarded a license to operate a digital bank. It recently established UnionDigital Bank Inc., which is targeting to start operations in the second semester of 2022.
