Westpac is selling a stake of up to $645 million in BT Investment Management as part of a plan to offload all its stake in the fund manager.
The Sydney-based lender is selling 60 million shares at a price range of $10.25 to $10.75 per share. The bottom of the range represents a discount of 16% to last closing price of $12.18.
The sale will add 10 basis points to Westpac’s common equity tier 1 capital ratio, a measure of a lender’s ability to meet future losses. Australian banks are selling assets to boost capital levels ahead of regulatory changes.
Westpac’s investment in BT Investment Management will fall to 10% from 29% and the lender will continue to hold the stake until at least May 2018, it said.
The lender said it didn’t need to control BT Investment Management as it was focusing on wealth management distribution, which doesn’t chew up as much capital. BT Investment Management offers investment products.
Westpac bought BT Financial Group in 2002, and carved out and floated BT Investment Management in 2007. It held a 59% stake until 2015, when it relinquished control by cutting its ownership to 31%.
Macquarie Capital is Underwriter and Bookrunner for the share sale Offer, Westpac said.