Some additional notes on the Union Bank SRO

In yesterday’s post, I talked about Union Bank [UBP 89.8 2.8%] [link] setting the price and entitlement ratio for its stock rights offering (SRO) and then quickly discussed the ex-date and record dates.

I had a few readers write in to remind me that the January 9 ex-date is actually a Monday, so that means that anyone looking to participate would need to own the stock by the end of day today (January 6) and hold it through to the record day on January 12.

I also had a few readers comment on whether or not I thought UBP to be a good long-term buy given its relatively high price-to-book value as compared to its peers, but banks aren’t really my thing, and besides, giving thumbs-up or thumbs-down recommendations is even less of my thing.

MB BOTTOM-LINE

My intent was to underline that the size of the discount was quite large, and that the level of the discount wasn’t likely to have a huge impact on the post-listing stock price given the small size of the SRO relative to UBP’s outstanding shares.

Sure, this kind of transaction really benefits the owners as it allows them to get a great value for their injected capital, but it also gives long-term holders and short-term players alike an opportunity to make some money as well. M

aybe you already own UBP and you’re not interested in increasing your position, but you could always avail of the SRO, and then sell the shares to push into something else that you might like, with that purchase partially funded by the difference between the discounted SRO price and the post-listing UBP market price.