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Tuesday, April 15, 2014

CHINA BANKING CORPORATION (CHIB): Prices Php8.0Bil rights offering at Php49.50/sh

Rights offer details announced. China Bank disclosed that its stock rights offering will be conducted at an offer price of Php49.50 per rights share, a 21% discount to yesterday’s closing price of Php62.10/sh. The bank is offering up to 161.62Mil shares at the entitlement ratio of 1 rights share for every 8.83 existing common shares held. Assuming full subscription, total gross proceeds would reach Php8Bil

OFFER PRICE: Php49.50
ENTITLEMENT RATIO: 1:8.83
GROSS PROCEEDS: 8.0BIL
EX-RIGHTS DATE: APRIL 21, 2014
OFFER PERIOD: APR 30 - MAY 7 2014



Maintaining HOLD rating; pullbacks could be opportunities to BUY. We currently have a HOLD rating on CHIB with a pre-rights FV estimate of Php56/sh. Accounting for the discount on the rights offering, our FV estimate would be adjusted to Php55.30 effective April 21 (ex-date). We believe that the share price could remain depressed over the short term as the market takes time to absorb the additional shares. Our buy-below price is set at Php48.70 pre-rights and at Php48.00 post the ex-rights date.

Source: COL Financial

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