The Investor Sentiment - Equity and investments forum for Sri Lankans

Join the forum, it's quick and easy

The Investor Sentiment - Equity and investments forum for Sri Lankans
The Investor Sentiment - Equity and investments forum for Sri Lankans
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Please send an email to if you face any technical difficulties when posting
Display results as :
Advanced Search
Latest topics
CCS.N0000 ( Ceylon Cold Stores)Wed Mar 20, 2024 11:31 amHawk Eye
When Will It Be Safe To Invest In The Stock Market Again?Wed Apr 19, 2023 6:41 amකිත්සිරි ද සිල්වා
Dividend AnnouncementsWed Apr 12, 2023 5:41 pmකිත්සිරි ද සිල්වා
MAINTENANCE NOTICE / නඩත්තු දැනුම්දීමThu Apr 06, 2023 3:18 pmකිත්සිරි ද සිල්වා
SEYB.N0000 (Seylan Bank PLC)Thu Mar 30, 2023 9:25 amyellow knife
The Korean Way !Wed Mar 29, 2023 7:09 amකිත්සිරි ද සිල්වා
In the Meantime Within Our Shores! Mon Mar 27, 2023 5:51 pmකිත්සිරි ද සිල්වා
What is Known as Dementia?Fri Mar 24, 2023 10:09 amකිත්සිරි ද සිල්වා
SRI LANKA TELECOM PLC (SLTL.N0000)Mon Mar 20, 2023 5:18 pmකිත්සිරි ද සිල්වා
THE LANKA HOSPITALS CORPORATION PLC (LHCL.N0000)Mon Mar 20, 2023 5:10 pmකිත්සිරි ද සිල්වා
Equinox ( වසන්ත විෂුවය ) !Mon Mar 20, 2023 4:28 pmකිත්සිරි ද සිල්වා
COMB.N0000 (Commercial Bank of Ceylon PLC)Sun Mar 19, 2023 4:11 pmකිත්සිරි ද සිල්වා
REXP.N0000 (Richard Pieris Exports PLC)Sun Mar 19, 2023 4:02 pmකිත්සිරි ද සිල්වා
RICH.N0000 (Richard Pieris and Company PLC)Sun Mar 19, 2023 3:53 pmකිත්සිරි ද සිල්වා
Do You Have Computer Vision Syndrome?Sat Mar 18, 2023 7:36 amකිත්සිරි ද සිල්වා
LAXAPANA BATTERIES PLC (LITE.N0000)Thu Mar 16, 2023 11:23 amකිත්සිරි ද සිල්වා
What a Bank Run ?Wed Mar 15, 2023 5:33 pmකිත්සිරි ද සිල්වා
104 Technical trading experiments by HUNTERWed Mar 15, 2023 4:27 pmkatesmith1304
GLAS.N0000 (Piramal Glass Ceylon PLC)Wed Mar 15, 2023 7:45 amකිත්සිරි ද සිල්වා
Cboe Volatility Index Tue Mar 14, 2023 5:32 pmකිත්සිරි ද සිල්වා
AHPL.N0000Sun Mar 12, 2023 4:46 pmකිත්සිරි ද සිල්වා
TJL.N0000 (Tee Jey Lanka PLC.)Sun Mar 12, 2023 4:43 pmකිත්සිරි ද සිල්වා
CTBL.N0000 ( CEYLON TEA BROKERS PLC)Sun Mar 12, 2023 4:41 pmකිත්සිරි ද සිල්වා
COMMERCIAL DEVELOPMENT COMPANY PLC (COMD. N.0000))Fri Mar 10, 2023 4:43 pmyellow knife
Bitcoin and Cryptocurrency Fri Mar 10, 2023 1:47 pmකිත්සිරි ද සිල්වා
CSD.N0000 (Seylan Developments PLC)Fri Mar 10, 2023 10:38 amyellow knife
PLC.N0000 (People's Leasing and Finance PLC) Thu Mar 09, 2023 8:02 amකිත්සිරි ද සිල්වා
Bakery Products ?Wed Mar 08, 2023 5:30 pmකිත්සිරි ද සිල්වා
NTB.N0000 (Nations Trust Bank PLC)Sun Mar 05, 2023 7:24 amකිත්සිරි ද සිල්වා
Going South Sat Mar 04, 2023 10:47 amකිත්සිරි ද සිල්වා
When Seagulls Follow the TrawlerThu Mar 02, 2023 10:22 amකිත්සිරි ද සිල්වා
Re-activatingSat Feb 25, 2023 5:12 pmකිත්සිරි ද සිල්වා
SAMP.N0000 (Sampath Bank PLC)Wed Nov 30, 2022 8:24 amකිත්සිරි ද සිල්වා
APLA.N0000 (ACL Plastics PLC)Fri Nov 18, 2022 7:49 amකිත්සිරි ද සිල්වා
Banks, Finance & Insurance Sector ChartTue Nov 15, 2022 5:26 pmකිත්සිරි ද සිල්වා
VPEL.N0000 (Vallibel Power Erathna PLC)Sun Nov 13, 2022 12:15 pmකිත්සිරි ද සිල්වා
WATA - WatawalaSat Nov 05, 2022 8:44 amකිත්සිරි ද සිල්වා
KFP.N0000(Keels Food Products PLC)Sat Nov 05, 2022 8:42 amකිත්සිරි ද සිල්වා
Capital Trust Broker in difficulty?Fri Oct 21, 2022 5:25 pmකිත්සිරි ද සිල්වා
IS PIRATING INTELLECTUAL PROPERTY A BOON OR BANE?Thu Oct 20, 2022 10:13 amකිත්සිරි ද සිල්වා
What Industry Would You Choose to Focus?Tue Oct 11, 2022 6:39 pmකිත්සිරි ද සිල්වා
Should I Stick Around, or Should I Follow Others' Lead?Tue Oct 11, 2022 9:07 amකිත්සිරි ද සිල්වා
DV-2024 Program: Online RegistrationThu Oct 06, 2022 11:26 amකිත්සිරි ද සිල්වා

Information posted in this forum are entirely of the respective members' personal views. The views posted on this open online forum of contributors do not constitute a recommendation buy or sell. The site nor the connected parties will be responsible for the posts posted on the forum and will take best possible action to remove any unlawful or inappropriate posts.
All rights to articles of value authored by members posted on the forum belong to the respective authors. Re-using without the consent of the authors is prohibited. Due credit with links to original source should be given when quoting content from the forum.
This is an educational portal and not one that gives recommendations. Please obtain investment advises from a Registered Investment Advisor through a stock broker

Go down
stocks hunter
stocks hunter
Top contributor
Top contributor
Posts : 1280
Join date : 2014-03-16

Smaller shareholders get windfall from mandatory offer for UBC Empty Smaller shareholders get windfall from mandatory offer for UBC

Sun Oct 26, 2014 8:52 am
Smaller shareholders of Union Bank of Colombo PLC (UBC) got a windfall from the mandatory offer of Rs. 25 per share offered for a small fraction of their holding finding that up to 10,000 of their shares would be taken at the 25-rupee price.

Those who had more had the benefit of 16.01% of the excess also accepted.

This was possible as many of the big shareholders, including Mr. Alexis Indrajit Lovell, Chairman of UBC owning 6.51 percent of the bank, had not accepted the offer.

Lovell had entered into an agreement with Culture Financial Holdings Ltd. (CFHL), now controlling UBC, that he will not divest his UBC shares for an agreed (but undisclosed) period of time, thereby effectively undertaking not to accept the mandatory offer to the minority shareholders of the bank, a circular to UBC shareholders revealed.

But many other bigger shareholders too had not accepted the offer making it possible for the offeror to take much more than the 6.25% of the individual shareholdings for which the offer was made.

According to a Stock Exchange filing, 271 shareholders had offered 8.58 million shares on the 6.25% percent basis of the offer while 245 had tendered 78.1 million shares in excess of this percentage hoping that get a part of the additional slack available from non-acceptance.

In the event they got much more than they had anticipated thanks to some of the bigger shareholders, with no agreement like Lovell, opting not to accept.

``Unfortunately some shareholders who would have gladly surrendered 10,000 shares at the Rs. 25 price didn’t submit acceptances thinking that just a small fraction of their holdings would be taken,’’ a broker said.

CFHL is a 100% subsidiary of TPG Asia VI SF Pte. Ltd. (Singapore) recently took control of UBC by acquiring 742.16 million shares through a private placement of shares at a price of Rs. 15.30 per share.

PricewaterhouseCoopers (Pvt) Limited had expressed the view that the offer of Rs.25 per UBC Share by CFHL is fair and reasonable to ordinary shareholders of the bank.

CFHL, currently owning 68% of UBC, has offered to purchase up to 2% of the enlarged share capital amounting to 6.25% of shares held by every shareholder of UBC excluding the offeror.

Under conditions of approval given by the Central Bank, it can only acquire 70% of UBC and therefore only acquire 2% of the issued shares of 21.8% of the shares not already owned by them.

Pricewaterhouse has noted that between September 1, 2013 and September 29, 2014 UBC traded at a low of Rs.15.20 and a high of Rs.23.80. They have noted that the highest traded price was still lower than the Rs.25 offer price.

"The weighted average price for the 6-month period up to 29 September 2014 was Rs.21.61 and the Offer Price of Rs.25 per share of UBC represent a premium of 15.7% to the weighted average price per share of UBC," Pricewaterhouse has noted.

Based on the net asset value, the UBC share was worth Rs.13.30 and the Rs.25 offer price represented a premium of 87.9% to the net asset value, they said.

"Based on the market based Price-to-Book multiple approach value for UBC of Rs.15.09 per share, the Offer Price of Rs.25 per share of UBC represents a premium of 65.7%," they have noted.

UBC has two subsidiaries, UB Finance Co. Ltd. in which UBC holds 66.17% and National Asset Management Ltd. in which UBC holds 51%.

As at August 15, 2014, there were six entities and individuals holdings more than 5% of UBC. They are Vista Knowledge Pte Ltd (18.52%), Sampath Bank PLC (7.534%), Associated Electrical Corporation Ltd (7.47%), Select Gain Limited (6.70%), Mr. Alexis Indrajit Lovell (6.51%) and Mr. C.P.A. Wijeyesekera (5.30%).

CFHL has said that its strategic and operational objective is to grow UBC to be among the top five listed licensed commercial banks in terms of assets in line with the Central Bank’s policy initiative to create a well capitalized and larger banking sector to support long-term sustainable growth.

The offer says these investments will strengthen UBC’s capitalization ensuring the bank will satisfy the increased capital requirement of the Central Bank and contribute to the overall stability of the country’s financial sector.

They also plan to introduce an Employees Stock Option Plan (ESOP) conferring relevant employees with the right to subscribe up to 5% of the issued share capital of UBC.

"UBC believes that the combination of capital, operational and strategic measures will lead to significant value generation in the bank over the course of the coming years and the bank will be adequately positioned for growth in the medium term.

"In the short term the investment would enable the bank to reduce the cost of funds and strengthen the financial stability of its subsidiary operations.

"Increased economic activity and uptake of credit demand is expected to drive medium term growth and provide the opportunity to leverage the bank’s strengthened balance sheet following the capital injection by the Offeror," the document circularized to shareholders said
Back to top
Permissions in this forum:
You cannot reply to topics in this forum