SYDNEY: Westpac Group has announced it will be selling its 10.7% stake in Zip Co Limited by way of a fully underwritten book build to institutional investors domiciled in Australia and other relevant jurisdictions.
The offer price for the shares is $6.65 per share, which equates to a discount of 6.07% to Zip’s last closing price of $7.08 on 21October 2020.
The decision reflects Westpac’s approach to simplifying its business and ensuring the efficient use of capital.
The sale will add around 8 basis points to Westpac’s common equity tier 1 capital ratio.
Westpac Chief Information Officer, Gary Thursby, said: “Larry Diamond, Peter Gray and the management team of Zip have done a tremendous job growing the company, including expanding globally. We look forward to seeing them continue to grow a global customer franchise.
“We are continuing to explore opportunities with Zip, including working to integrate their buy now pay later functionality into our mobile banking apps across Westpac and our Regional bank brands. This would expand our offering to customers and broaden the customers Zip can reach.
“We are also working with Zip on other opportunities for consumer, business, and corporate customers that we believe could be mutually beneficial, while continuing to develop our banking relationship with Zip.”
UBS is acting as Sole Lead Manager, Underwriter and Bookrunner of the offer. Settlement of the transaction is expected to occur on 26 October2020.
In 2017, Westpac made an initial $40 million equity investment in Zip, with a subsequent $8.9 million invested in 2019.
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