Westpac announces BT Investment Management Institutional and Retail offer
(18 June 2015 – Australia) Westpac Group announced on 16 June its intention to sell part of its shareholding in BT Investment Management (BTIM).
The sale will be facilitated by a fully-underwritten Institutional Offer of 55 million shares (approximately 19 percent of BTIM's issued capital).
The Institutional Offer was undertaken over 16 - 17 June via a bookbuild while BTIM shares are in a trading halt; and a non-underwritten Retail Offer to existing eligible Westpac and BTIM shareholders of up to 27 million shares (approximately 9 percent of BTIM's issued capital) at the same price as the Institutional Offer.
The Westpac Group's holding will reduce from its current 59 percent of BTIM's issued capital to between 31 percent and 40 percent.
The sell-down will generate a post-tax accounting gain on sale of between A$0.6 and A$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 chief financial officer, 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 currently intends to retain a shareholding between 31 percent and 40 percent, with the chief executive of BT Financial Group, Brad Cooper, remaining as a non-executive director on the BTIM Board.
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