Tan ready to sign new pact with gov’t on PNB shares

Taipan Lucio Tan is ready to sign a new agreement with the government that would tie him to a "put and call" option which would enable Tan to complete the purchase of the government’s shares in Philippine National Bank two years from now or for the government to reverse the process and buy back the same shares.

In an ambush interview, Tan confirmed that he is amenable to the "put and call" option and would be signing an agreement with the government soon.

Finance Secretary Jose T. Pardo had revealed that following Tan’s decision to back out from buying the government’s 30.4-percent stake in PNB, government was able to draw up a plan whereby the doors would not be totally closed to the purchase.

Under the put option, Tan would have to buy the 30.4-percent stake two years from now if government is still unable to sell its stake in PNB.

As a concession to Tan, his P600-million deposit to bid for the 30.4-percent stake would still be considered as a downpayment and would not be completely forfeited.

On the other hand, the government has also crafted a call option in the hope that PNB will have turned around two years from now, to be able to buy back the shares that government had effectively ceded to Tan through a Sept. 30 stock rights offering.

The 30.4-percent stake of government in PNB has been diluted to about 16 percent due to the stock rights offering in which government did not subscribe.

Pardo said the government will wait for some time before deciding if it would still go ahead and sell its remaining stake in PNB.

At present, PNB shares are trading below P40 per share compared to the P100 per share that government is imposing on Tan under the put option. – Marianne Go