Lucio Tan may seek approval to match highest offer for PNB stake

The Lucio Tan Group may seek the approval of the Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) to match the highest offer for the 67-percent stake in Philippine National Bank (PNB).

A BSP source said yesterday that under existing banking rules, any individual or corporation can only own up to 40 percent of a bank.

"It is an option for Mr. Lucio Tan to have a pre-clearance from MB so he will not encounter any problem if in case he would be matching the bid of other groups," the source said.

The source said Tan may use other corporations as long as it complies with the 40-percent ceiling imposed under BSP rules.

"If a bank will acquire another bank it can own up to 100 percent, but an individual or non-bank is limited to own only 40 percent," the source explained.

"It is their (Tan Group) lookout, if they have no prior approval from MB," the source said. "If the Tan Group has to comply with ownership ceiling, the assumption is that they can only own 40 percent."

The government and the Tan Group are jointly selling the PNB shares on Friday, Aug. 12, for at least P11 billion. The sale is an offshoot of an agreement in 2001 when the government helped Tan and bailed out PNB. The stake to be sold is evenly owned by Tan and the government.

Upon request of the Philippine Deposit Insurance Corp. (PDIC), all interested parties who want to participate in the bidding for PNB shares will have to seek the approval of the MB to avoid future "conflicts" in the future.

"PDIC approached MB if the latter could conduct a pre-clearance on bidders of PNB to ensure that there would be no problem just in case the said bidder won the auction," the source said.

Under the BSP’s "fit and proper" rules, if an individual is buying 20 percent or more or a number of shares equivalent to one board seat of a bank, it is imperative that he seek the approval of the monetary authority.

Meanwhile, the MB has approved the application of Union Bank of the Philippines and its partner, US-based foreign investment bank, AvenueAsia Capital Group, to bid for the joint sale of PNB.

MB member Vicente Valdepenas said that in approving the application of Union Bank/AvenueAsia, they felt that the group has the capacity to vie for the PNB stake.

"Avenue of USA has $6.5-billion assets while Union Bank is an overcapitalized bank," Valdepenas said.

Valdepeñas said that in case the group wins, Union Bank has the capability to quickly effect a merger and/or consolidation of PNB with Union Bank operations.

"When they acquire it (PNB), they can hit the ground running and will not have to wait for weeks before they can run the bank because Union Bank has the high-tech facility, " Valdepeñas said.

So far, Union Bank/AvenueAsia is the only contender of tycoon Lucio Tan in vying for the 67-percent stake in PNB. Tan, based on the previous sale agreement with the government on PNB shares, has the right of first refusal.

According to Valdepeñas, there are no other banks that have submitted an application with the BSP to participate in the bidding for PNB shares.