The bank, controlled by the Philippines’ richest man, Henry Sy, said in a statement it will sell 895.2 million common shares to existing shareholders at P48.60 ($1.12) per share.
The offer will run from June 18 to 27 but will only be available to those who hold BDO stock as of June 7, said its chairwoman, the shopping mall tycoon’s daughter Teresita Sy.
“This capital raising is intended to support the growth and expansion of the bank amidst the positive sentiment on the economy,” Teresita Sy said in the statement.
“At the same time (it will) strengthen the bank’s capital position in anticipation of new Basel III requirements,” she added.
Existing shareholders will be entitled to buy one share for every three they already own.
“It’s priced reasonably, equivalent to around 1.2 times book value,” said Eagle Equities Inc. president Joseph Roxas. “This should be well taken up.”
BDO said the offer price was based on the 15-day volume-weighted average price of BDO common shares listed on the Philippine Stock Exchange at a discount of 24.9 percent.
BDO Unibank closed 0.15 percent higher on Tuesday at P65.05.
The additional shares have been given a tentative listing date of July 4.
The move comes as the so-called Basel III rules mandating banks increase their capital-to-assets ratios, which are designed to avert another crisis like that seen in 2008, are set to be rolled out from next year.
The new rules will require banks to raise their high-quality core capital to 7 percent of total assets from the current 2 percent.
The transaction was arranged by Citigroup, Deutsche Bank and JP Morgan as joint international lead managers and underwriters. United Overseas Bank Ltd. acted as international co-lead manager and co-lead underwriter while BDO Capital & Investment Corp. was issue manager and domestic underwriter. Doris C. Dumlao