Parent bank tenders for remaining UOBT stock
United Overseas Bank (UOB) yesterday launched a final tender offer for the outstanding 121 million shares in United Overseas Bank (Thai) at a price of Bt6.84 in order to de-list its stock from the market.
When the stock exchange opened, the price jumped to Bt6.6 from Bt5.35 and edged up further to close the day 25 per cent higher at Bt6.70.
The move to buy up the last outstanding shares comes after UOB of Singapore increased its stake in the local bank to 98.5 per cent. But that put it in breech of Stock Exchange of Thailand regulations that require a publicly traded companies to have at least 15 per cent of its stock in play and that at least 150 minority shareholders own the stock.
"With the small number of minority shares on the market, there was diminished interest in UOBT stocks so the bank is unable to fulfil the stock exchange listing requirement," the bank said in a statement.
The local bank was recently renamed when UOB Radanasin Bank completely merged with Bank of Asia.
UOB has assigned Sage Capital as its financial adviser for the tender offer, the period of which has not been disclosed.
Samart Buranawatanachoke, assistant governor of the Bank of Thailand (BOT), said he was not surprised that UOBT would de-list from the SET because its trading volume is low. The bank does not need capital from retail shareholders because the Singaporean parent bank has a strong financial status, he said.
He insisted that the central bank would still be able to examine the bank's performance and stability as it would comply with all the regulations set by the BOT, including the capital-adequacy ratio requirement of 8.5 per cent of risk assets.
UOBT's customers are still able to examine the bank's financial status from its monthly reports on assets, lending and deposit as well as its annual report.
"If banks are listed it is easier to raise funds but if they don't want to raise funds from the stock market, it is their decision," Samart said.
UOBT's free float is already far below the SET's requirement, which is another reason for its de-listing, said Poramet Tongbua, head of research at Tisco Securities.