Unidentified investor offers to buy 80% of EPCIB at P95/share

An unidentified buyer has offered to buy Equitable PCI Bank shares held by the major shareholders at P95 each, state-run pension fund Government Service Insurance System (GSIS) president and general manager Winston Garcia told the Philippine Stock Exchange yesterday.

The major shareholders of EPCIBank are the SM Group of retail tycoon Henry Sy which holds about 34 percent, the Social Security System (26.6 percent), GSIS (12 percent), and Trans-Middle East Philippines Equities (7.1 percent). Together, they hold nearly 80 percent of the bank.

"The SM Group has not received a written binding offer supposedly for P95 per share, in cash, with no due diligence," Sy’s group said in a separate statement.

The Sy group, however, said that "based on those conditions, we may consider." The SM Group’s shares in EPCIBank are held by listed investment holding company SM Investments Corp. and Banco de Oro Universal Bank.

The P95 offer price is much higher than the P56.50 per share the SM Group paid when it acquired the Go family’s 24.76-percent stake in the Philippines’ third-largest lender last year. The group later raised its stake to 34 percent.

"If this price is acceptable to the SM Group, kindly inform me so that the buyer can immediately discuss with you or with any of your group’s authorized representative mutually acceptable terms and conditions of the proposed purchase," Garcia said in a letter to Teresita Sy, the SM Group’s main representative in EPCIBank.

EPCIBank shares closed P1.50 higher at P74.50 per share yesterday following the GSIS’s announcement of the offer from an undisclosed investor. BDO was flat at P35 each.

The SM Group had offered to merge BDO with EPCIBank through a share swap with BDO as the surviving entity. It proposed to swap 1.6 BDO shares for every share of EPCIBank. When the SM Group made the offer, the bid valued EPCIBank shares at P76.

The merger offer, however, lapsed without any agreement as the GSIS and Trans-Middle East went against the proposal. The merger proposal needs a vote of 67 percent of total outstanding shares.

Should all major EPCIBank shareholders agree to sell their stakes to the unnamed buyer, the latter would have to buy the remaining 20 percent of the bank at the same price as required under the tender offer rules of the Securities Regulation Code.

An offer of P95 values EPCIBank at P69.06 billion. The bank’s current market capitalization stands at P54 billion.

GSIS has placed its entire EPCIBank shares on the auction block, seeking a minimum of P92 per share, the price at which it bought its stake in the bank in 1999.

It has extended for another month or until April 6 the deadline for the submission of bids for its 90,078,333 EPCIBank shares to accommodate requests of interested parties and to get the best offer possible.

It said it received inquiries from two foreign investor groups based in California.