UnionBank to raise $1.1bn to fund purchase

UnionBank of the Philippines is generating up to 59 billion pesos ($1.1 billion) in a stock rights offering to fund the acquisition of Citigroup’s consumer banking operations in the nation. The Aboitiz family, one of the country’s wealthiest families, is the bank’s largest shareholder.

According to a regulatory filing with the Philippine Stock Exchange, the bank wants to offer up to 800 million shares to current shareholders at a discounted price of 64.55 to 73.78 pesos per share.

UnionBank shares finished at 97.80 pesos yesterday, up 2.8 percent, and were trading at 97 pesos on Friday morning. The sale, which is backed by Aboitiz Equity Ventures, The Insular Life Assurance Co., and the Philippine pension fund Social Security System, begins on April 25 and runs until May 6.

UnionBank agreed to buy Citigroup’s consumer banking unit in the Southeast Asian nation for 55 billion pesos in cash in December, including a premium of 45.3 billion pesos over the assets’ valuation. The transaction, which is anticipated to close in the second half of the year, also includes real estate assets such as Citibank Square in Quezon City’s Eastwood District, as well as the bank’s three full-service branches and five wealth management centres.