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On Wednesday, 14 October, Westpac announced a fully underwritten, pro rata accelerated renounceable entitlement offer to raise approximately $3.5 billion, which allows eligible shareholders to buy new, fully paid ordinary shares in Westpac at an offer price of $25.50 per new share.
On Friday the major bank announced that it had successfully completed the institutional component of the entitlement offer, raising approximately $1.6 billion.
In a trading update the group said the institutional entitlement offer was strongly supported, with approximately 95 per cent of entitlements taken up by eligible institutions. Entitlements not exercised by eligible institutional shareholders and entitlements of ineligible institutional shareholders were taken up in the institutional shortfall book-build at a clearing price of $30.00 per new share (being the offer price of $25.50 per new share, plus $4.50 per entitlement).
“This represents a 2 per cent premium to the Theoretical Ex-Rights Price (“TERP”) 1,” the group said.
“Eligible institutional shareholders who elected not to exercise their entitlements, and ineligible institutional shareholders, will receive $4.50 in cash for each entitlement sold in the institutional shortfall book-build, less any applicable withholding tax,” it said.
“New shares issued as part of the institutional entitlement offer (including as part of institutional shortfall book-build) are expected to be issued on Thursday, 29 October 2015 and commence trading on ASX on the same day.”
Westpac said that as new shares issued under the institutional entitlement offer will not be entitled to the 2015 final dividend, they will trade under a separate ASX code (“WBCN”) until the ex-dividend date for the 2015 final dividend, expected to be 11 November 2015.
The bank said that new shares will rank equally with existing shares in all other respects.