This group, which is composed of the Social Security System (SSS), the Government Service Insurance System (GSIS) and Trans Middle East Philippines Equities, Inc.. (TMEQ) control a combined 46 percent of Equitable PCI Bank.
"I don’t think this (share swap offer) will go through. We will work together to protect the interest of the three," Romualdez, who is also the chief executive of TMEQ, said.
Banco de Oro and its owner Henry Sy bought 25 percent of larger rival Equitable PCI Bank in August. Last Friday, Banco de Oro offered 1.6 Banco de Oro shares for each Equitable share.
TMEQ, along with the two government pension funds, formed a group that challenged then chairman Antonio Go’s control of Equitable PCI Bank.
"We have a working relationship that protects each other’s interest," Romualdez added.
The group, through Romualdez and GSIS president and general manager Winston Garcia, also questioned the valuation of the a share swap offer.
"It is unethical and poor timing on the part of Banco de Oro to make the offer," Garcia said hours after the formal offer was received.
"The price is not even at par with the market and why should it result on the demise of the bank (Equitable PCI Bank)," Garcia added.
Simulations showed that the ratio of 1.6 Banco de Oro shares per Equitable PCI Bank share would translate to a price of between P43 and P53, substantially lower than Equitable’s closing price of P63 a share when the offer was made.
Meanwhile, Garcia hinted that he is planning to file a complaint of poor corporate practice against the Sy block seated at the Equitable PCI Bank board.
"There is a conflict of interest here. They have access to confidential information," the GSIS general manager said.
Four members of the 15-man Equitable PCI Bank board represent the Sy shares including Teresita T. Sy and Exequiel P. Villacorta Jr.
Confidential issues such as the need for additional capital and its exact amount were among the basis allegedly used for the 1.6:1 share swap ratio.
Last week, Banco de Oro made a formal share swap offer to Equitable PCI Bank as another step toward merging the two banks with the former as the surviving entity.
Banco de Oro president and chief executive officer Nestor V. Tan said the valuation was based on the market study, "we feel that the exercise would result in a bigger, stronger and better capitalized bank with combined sources estimated at P500 billion."
"The combined institution is expected to yield substantial synergy in terms of cost savings and revenue enhancement, as well as benefit from an upgrade in its credit standing. The merged institution will move up to large capitalized category which is defined as companies with market capitalization of at least $700 million," Tan added.
SSS president and chief executive officer Corazon dela Paz declined to take a clear decision, saying that they will consider Banco de Oro’s proposal.
"We will still have to study the offer, look at the options, and review the credibility of their valuation (l.6 to one share offer)," de la Paz said.