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May 27, 2024

UnionBank shareholders inject P40B to fund acquisition of Citi’s retail banking business

Union Bank of the Philippines led by bankero Edwin Bautista raised P40 billion with the completion of a stock rights offering (SRO) to partially finance the retail banking business of Citigroup Inc. in the Philippines.

“Despite the challenging and volatile markets, our SRO was oversubscribed. This is testament to the invaluable support of our shareholders to our vision and strategy,” the bankero said.

The fund raising activity garnered strong participation from UBP’s existing investors, led by principal shareholders Aboitiz Equity Ventures (AEV), Social Security System (SSS), and Insular Life Assurance Company Ltd.

“We are confident that with the same level of shareholder support, we will

continue to execute our strategic initiatives and create superior shareholder value.”

The Aboitiz-led bank issued approximately 617.2 million common shares priced at P64.81 per share. The shares were offered to eligible shareholders as of April 11 at a ratio of one rights share for every 2.4707 existing common shares.

The offer was almost completely subscribed after the first round with the

remaining shares distributed to UnionBank’s shareholders that expressed interest in additional subscriptions.

The SRO was heavily oversubscribed at the end of offer period. CLSA Exchange Capital Inc., and ING Bank N.V., Manila Branch acted as Joint Global

Coordinators, and Joint Domestic Underwriters for the offering.

The listed bank said that the proceeds from the SRO will be deployed to partially fund the acquisition of Citigroup Inc.’s Philippine consumer business.

According to UnionBank, the acquisition is a transformational transaction for the listed bank as it leapfrogs the its credit card portfolio and delivers a high-quality consumer and wealth management customer base.