Westpac has commenced the BT Investment Management (BTIM) retail offer as part of the partial sell down of its shareholding in BTIM.
The retail offer involves offering eligible shareholders the opportunity to apply for either 600 shares, equal to $4,920 at the offer price, or 1,200 shares, equal to $9,840 at the offer price, which may be purchased without incurring brokerage and transaction costs.
Westpac is offering 27 million shares or approximately nine per cent of BTIM’s issued capital under the retail offer.
Westpac may scale back applications should it exceed this level. The offer price, $8.20 per share, is the same price as determined under the institutional offer. The retail offer will be fully underwritten.
The Westpac Group’s holding will reduce from its current 59 per cent of BTIM’s issued capital to between 31 per cent and 40 per cent.
The sell down will generate a post-tax accounting gain on sale of between $0.6 and $0.7 billion for Westpac. Westpac’s common equity tier one capital ratio is also estimated to increase by between 10 and 15 basis points. The accounting gain will be treated as a cash earnings adjustment in Westpac’s full year 2015 accounts.
Westpac Group CEO, Peter King, said the transaction delivers benefits to both Westpac and BTIM.
“The sale allows the group to realise a part of the investment in BTIM, increasing our capital ratios, while still maintaining a significant interest in BTIM.
“The strength and importance of the relationship remains unchanged. Wealth remains a strategically important focus for the Westpac Group and our continued investment in BTIM sees us maintain a stake in asset management which is a key factor in having a strong and diversified wealth business.”
King said the sale is also important for BTIM shareholders.
“The transaction increases the proportion of BTIM’s shares that are readily tradable, improving liquidity and helping facilitate inclusion in key equity indices,” he said.
Westpac has lodged the relevant prospectus with the Australian Securities and Investments Commission (ASIC) and the ASX.
The retail offer closes at 1700 Sydney time on July 10 2015.
