AUB scales down IPO proceeds

MANILA, Philippines - Commercial lender Asia United Bank (AUB) of the Rebisco Group has scaled down the estimated proceeds from its initial public offering (IPO) in the local bourse to P8.36 billion from the earlier targeted P9.68 billion following an international bookbuilding process.

The bank priced its shares at P95 apiece, well within the P80 to P110 price range, Lauro C. Baja III, managing director of UBS Investments Philippines Inc., said in a text message.

“The international orderbook was five times oversubscribed with approximately 90 investors,” Baja said, adding that 75 percent of the investors came from Asia and 25 percent from Europe.

The offer period will start on May 7 and end on May 14 while AUB will debut in the local stock exchange on May 17.

Last month, AUB secured the approvals of the Philippine Stock Exchange and Securities and Exchange Commission for the IPO, which will involve the public share sale of 88 million shares, including an over-allotment of eight million shares.

Baja said the Rebisco Group’s initial foray into the international capital markets “received overwhelming support from the investor community.” UBS was the sole global coordinator and joint bookrunner for the transaction.

The P95 per share price represents a 1.5x price-to-book value for AUB, below the industry average of 2x.

Baja said the commercial bank wants the price pegged at the mid-range to encourage aftermarket support.

It will be the second IPO this year, following the P3.2-billion share sale of thrift lender Philippine Business Bank in February.

AUB is owned by a consortium of Filipino industrialists, Taiwanese investment banks and Singapore venture capitalists. Republic Biscuit Corp., the Philippines’ leading manufacturer, distributor, and exporter of snack food products, owns 44 percent of AUB.

Other existing shareholders of AUB are Kuo Yu Philippines Holdings Inc., Lambda Holdings Corp. and Singapore-based Magis Equity Ventures.

“AUB has evaluated its capital in light of its business strategy and determined that the offer would further solidify the bank’s capital adequacy and financial strength and, more importantly, allow AUB to pursue its strategic growth initiatives,” the lender said.

Specifically, the strategic growth initiatives include “the continued expansion of its branch network via organic and inorganic means.”

As of end-2012, the 15-year-old bank had 107 branches.

AUB will use the P7.2-billion net proceeds for general corporate purposes, acquisitions of bank licenses and expansion of branch network.

AUB also plans to upgrade its technology infrastructure to enhance the core banking, enterprise content management, workflow systems, electronic and mobile banking distribution channels.

In June, AUB completed the integration of the 28-branch network of Asiatrust Development Bank Inc., which specializes in the small and medium enterprises market.

AUB is a medium-sized commercial bank, with total assets worth P64.94 billion as of last year. In 2012, its profits jumped to P1.42 billion from P1.12 billion a year ago on higher trading and securities gains.

AUB has been in a selective acquisition mode since 2009. It took over Rural Bank of Angeles, which has four branches and two satellite offices in Pampanga, boosting its presence outside Metro Manila. Its acquisition of the Cooperative Bank of Cavite is awaiting central bank approval.