UnionBank [UBP 79.65 0.44%] [link] board of directors approved a plan to raise P20 billion through a stock rights offering (SRO) or a private placement, depending on prevailing market conditions. According to The STAR, UBP’s President and CEO, Edwin Bautista, said that the money would be used to “further grow its retail banking segment and expand its newly launched Union Digital Bank”. There was no information regarding a timeline for the equity raise, or the timeline for the disbursements of the potential proceeds.
MB Quick Take: I like UBP’s aggressiveness, and I would like it even more if they plowed most of the proceeds into building their digital/online moat. Most of the other banks have trash-tier apps and treat online banking like this inconvenient trend that may possibly be profitable some day. Not UBP. They’ve operated at the very least like both the physical and digital worlds are one and the same. If only there were a truly ugly word that we could use to describe a bank that operates this way.
Rizal Commercial Banking Corp [RCB 23.95 7.40%] [link] halted for an hour on news it sold 382,057,224 common shares, at a price of P71/share, to Sumitomo Mitsui Banking Corporation (SMBC), for a total raise of P27.1 billion for RCB. The shares sold were 56% treasury shares and 44% authorized-but-unissued common shares. The sale raised SMBC’s stake in RCB to 20%. RCB’s market price at the time of the announcement was P22.30/share, so the deal was done at a 218% premium to market.
MB Quick Take: This isn’t even the first time these two have teamed up for a sneaky treasury sale. On June 29, 2021, RCB raised P4.5 billion selling 101.8 million common shares to SMBC at P44/share, which was a 131% premium to RCB’s market price of P19/share at the time of the sale. RCB noted then that the sale was done using RCB’s book value as a guide for value. RCB didn’t mention if that was the case here, but I can’t think of another measure of value that could result in such a premium.
Udenna Corp (UC) [link] is rumored to be considering a sale of Conti’s Bakeshop and Wendy’s, with “unnamed sources” claiming that the combined sale could raise up to US $200 million for Dennis Uy’s cash-strapped private holding company. This is not directly related to a PSE-listed company, but UC is a parent company to Phoenix Petroleum [PNX 8.47 0.35%], Chelsea Logistics [C 1.14 0.87%], PH Resorts Group [PHR 0.80 2.44%], and DITO CME [DITO 2.82 4.08%].
MB Quick Take: Dennis Uy has shown no hesitancy to slosh debt and equity around between those entities, so this sale (if real) could be the first step in the recapitalization of one of these struggling companies. The “word on the street” is that these “jewels” of the Dennis Uy Extended Universe have been low-key offered around to various groups as far back as March 2021, but there’s never been a hard value attached to the sale, and Dennis Uy’s needs have never been greater, so maybe there’s some fire to go along with these smoke whispers.
Premiere Horizon Alliance [PHA 0.28 3.77%] [link] blinks, and extends the deadline for Marvin Dela Cruz to make the final payment for the shares he subscribed for in 2020 as part of his takeover of PHA. Previously, the PHA board had given Mr. Dela Cruz until 29 October 2022 to make payment under the share purchase agreement, but that deadline has been extended to 27 December 2022.
MB Quick Take: Will an additional 59 days make a big difference, when Mr. Dela Cruz has already squandered 734 days to make good on his obligations? At least the disclosure didn’t rollback the PHA board’s refusal to accept shares in Mr. Dela Cruz’s “fintech” payments company, sQuidPay, which PHA has deemed to be “unviable”. The new deadline is the day before PHA’s annual stockholders’ meeting. Maybe PHA expects Mr. Dela Cruz will receive a huge envelope of cash as a Christmas gift this year?
--
Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.