TMB Bank has raised 38 billion baht through its shareholders' exercise of transferable subscription rights (TMB-T1) for newly issued shares as part of its planned acquisition of Thanachart Bank (TBank), worth 167 billion baht.
TMB chief executive Piti Tantakasem said 90% of the bank's shareholders exercised TMB-T1 for newly issued shares worth over 38 billion baht.
The bank also mobilised 15 billion baht from offering financial papers countable as tier-2 capital to local investors and another US$400 million or around 12 billion baht from issuing papers countable as tier-1 capital to foreign investors, he said.
"We believe the synergy for our service coverage will be expanded for products and service channels," Mr Piti said.
"This acquisition will increase our capability to develop products and services that better address our clients' needs."
TMB recently issued 31.5 billion units of TMB-T1 to its existing shareholders to raise up to 42 billion baht from converting the units to the bank's newly issued shares at a ratio of 1:1.
The acquisition deal marks the Thai banking industry's largest merger, making it the sixth largest bank by assets.
After the integration, Dutch bank ING, Thanachart Capital (TCAP), the Finance Ministry, Canada's Scotia Netherland Holding (BNS) and Vayupak Fund will hold stakes of 21.97%, 20.8%, 11.25%, 5.69% and 8.77% respectively, while minor shareholders will make up the rest.
The Finance Ministry holds a 25.9% stake in TMB and ING has a 29.9% stake. SET-listed TCAP holds a 51% stake in TBank, while BNS owns the remainder.
TMB said in a filing to the Stock Exchange of Thailand released late Monday that TMB has set the purchase price of TBank at 27.55 baht each, representing 1.1 times of TBank's book value per share, derived from consolidated financial statements as of Sept 30, 2019.
Based on the purchase price, the deal is valued at 167 billion baht.
According to the plan, TMB will acquire a 99.96% stake in TBank from TCAP and BNS and it will acquire the remaining 0.04% from minority investors between Dec 6 and 13 at 27.55 baht per share.
In addition to TBANK's share purchase from TCAP and BNS, TMB will issue 25.1 billion newly issued ordinary shares at a price of 2.16 baht per share, equal to 1.1 times of TMB's book value per share to TCAP's, BNS's and TBank's minority shareholders.
Of the total shares, 19.4 billion will be sold to TCAP, 5.72 billion to BNS and the remainder to TCAP for re-offering to minority investors of TBank.
The new entity emerging from the integration of TMB and TBank plans to focus on three core business areas: auto loans, mortgages and financial advisory services.
Auto lending is an area of expertise for TBank as it is the market leader.
TMB shares closed on Tuesday on the SET at 1.56 baht, down two satang, in trade worth 710 million baht.
