SEC gives GSIS 5 days to name mystery buyer of EPCIB shares

The Securities and Exchange Commission (SEC) has directed Government Service Insurance System (GSIS) president and general manager Winston Garcia to disclose the "mystery buyer" of shares in Equitable PCIBank to prevent speculation on the stock and safeguard the interest of the investing public.

Garcia was given five days by the SEC to name the buyer who has offered to acquire the shares held by majority shareholders in EPCIBank at P95 per share.

"GSIS is hereby directed to disclose to the Commission the identity of said "unnamed buyer" and the details of said offer within five days from receipt hereof," said Justina Callangan, head of the SEC’s Corporation Finance Department, in a letter to Garcia.

Callangan cited Rule 17 of the Securities Regulation Code as basis for requiring Garcia to disclose the identity of the unnamed buyer.

Under the said rule, an owner of more than five percent of the voting rights of a listed company or any related party thereof, who holds material information which may materially affect such company, may be required by the SEC to disclose such information within the period prescribed under said rule.

Failure to provide the required information shall subject said stockholder to sanctions applicable to violations of the rule, Callangan said.

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

Shares of EPCIBank have risen since Garcia announced the strong interest expressed by at least two foreign groups in acquiring the bank.

The 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 extended for another month, or until May 8, the deadline for the submission of bids for its 90,078,333 EPCIBank shares to allow interested parties to finalize their bids and consequently come up with the best offer possible. An offer of P95 values EPCIBank at P69.06 billion.

The bank’s current market capitalization stands at P54 billion.

The GSIS earlier said it received inquiries from two foreign investor groups based in California but did not name them. It hopes to raise at least P8.37 billion from the sale of its shares in EPCIBank.

The SM Group, however, said it has not received a written binding offer supposedly for P95 per share. Its 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 SM Group later raised its stake to 34 percent.

The SM Group had offered to merge Banco de Oro (BDO) with EPCIBank through a share swap with BDO as the surviving entity. It has proposed to swap 1.6 of 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 are against the proposal. The merger proposal needs a vote of 67 percent of 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 rule.