Bancolombia Drops on $1.4 Billion Share Sale Plan: Bogota Mover

Bancolombia SA, the nation’s largest bank, fell the most in four months after saying it would sell shares to raise capital after paying $2.5 billion for two Central American lenders last month.

The Medellin-based bank’s shares dropped 1.7 percent to 24,320 pesos at 11:41 a.m. in Bogota after earlier sliding 3 percent, the biggest intraday decline since July 10. It was the worst performer after Petrominerales Ltd. on the benchmark Colcap index, which declined 0.5 percent.

Bancolombia’s board instructed management to structure a public offering of 110 million shares in Colombia, worth 2.7 trillion pesos ($1.4 billion) at yesterday’s closing price, according to a U.S. regulatory filing. The transaction requires advance approval from Colombia’s financial regulator, according to the filing, which didn’t provide an estimated time frame.

“I was a bit surprised by the timing, which was earlier than I was thinking, and by the amount, since I thought they would need less,” Juan C. Dominguez, an analyst at Credicorp Capital’s Colombia unit, said in a telephone interview.

The bank is seeking sufficient capital to maintain growth, Martha Elena Acosta, a Bancolombia spokeswoman, said in a telephone interview yesterday.

Regulatory approval could take six to eight weeks, Acosta said today in an e-mailed response to questions.

Bancolombia closed its $2.2 billion deal for HSBC Holdings Plc’s Panama unit in October after completing the $217 million purchase of a stake in Guatemala’s Grupo Agromercantil Holding earlier in the month.

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