ANZ sells A$2.5 bn in shares to fund bid for RBS unit

Australia & New Zealand Banking Group Ltd sold A$2.5 billion ($2 billion) of shares to fund a bid for Royal Bank of Scotland Plc’s Asian assets.

Australia’s fourth-largest lender sold shares to institutional investors at A$14.40 each, a 7.5 per cent discount to its last traded price, the Melbourne-based company said in a statement today. The sale was “significantly oversubscribed” and attracted a wide range of investors, the statement said.

Chief Executive Officer Mike Smith, who joined ANZ after running HSBC Holdings Plc’s Asian operations, is raising funds as Australia’s economy is in its first recession in 18 years. ANZ is up against HSBC and Standard Chartered Plc in its bid for RBS’s Asian assets, which range from trading desks in Australia to bank branches in Pakistan.

“Buying distressed financial assets at a weak point in the market is a good strategy, but you have to have the financial strength to run the business through the remainder of the trough,” said Angus Gluskie, who manages about $260 million at White Funds Management Pty in Sydney.