Why BT Investment Management Ltd shares are frozen today

Shares of BT Investment Management Ltd (ASX:BTT) have been placed in a trading halt as its largest shareholder, Westpac Banking Corp (ASX:WBC) seeks to sell down its holding.

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Shares of BT Investment Management Ltd (ASX: BTT) (BTIM) were today placed in a trading halt on the back of a decision by its major shareholder, Westpac Banking Corp (ASX: WBC), to divest a substantial portion of its ownership.

In an announcement to the ASX, BTIM said Westpac is seeking to sell down 55 million shares to institutional investors and up to 27 million shares to retail investors. Westpac currently holds around 59% of all BTIM shares.

Following the sell down, its holding will reduce to between 31% and 40%. Westpac's sell down will increase liquidity for BTIM shares whilst also raising between $600 million and $700 million for Westpac, which is scrambling to raise capital in the face of increasing regulatory oversight by Australia's banking authority, APRA.

Westpac recently raised $2 billion through a partially underwritten dividend reinvestment plan. The institutional component of the sell down is expected to take place over the next two days, over which time BTIM shares will remain in a trading halt. So far in 2015 BTIM shares have climbed 30%.

Motley Fool contributor Owen Raskiewicz has no position in any stocks mentioned. Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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