Westpac (WBC) has raised $247 million from institutions from an initial public offer (IPO) of shares in funds manager BT Investment Management (BTIM).
Westpac announced that the book build closed last night, with a final price of $4.80 per share, which was the lower end of an indicative price range of $4.80 to $5.50 per share.
This low-end pricing reflects investor concerns about the repercussions of the US subprime crisis as well as the below-par performance of some newly listed funds management companies.
Westpac will hold a 60% stake in BT, with 7% going to BT staff and 33% to the market.
"The Offer received strong support from Westpac's shareholders as well as a number of quality institutional investors," said BTIM Chairman Brian Scullin
Of the $247 million proceeds, BT said $3.5 million will be used to pay offer costs and $13.75 million will fund equity grants to new employees, with the balance used to repay the loan from Westpac used to purchase BT.
The IPO is aimed at providing incentives for key funds management staff to remain with the business rather than defecting to smaller boutique funds managers that offer equity stakes, as has been a trend in Australia.
The company's shares are expected to start trading on the Australian stock exchange on Monday.
Westpac rose 2.23% or 63 cents higher to close up at $28.93.
