BSP okays transfer of EPCIB shares to SM Group

The Bangko Sentral ng Pilipinas (BSP) has approved the transfer of shares held by the Government Service Insurance System (GSIS) and EBC Investment Inc. to the SM Group.

The approval of the transfer would facilitate the initial accumulation of shares by the Henry Sy Group in Equitable PCI Bank, the transaction that preceded the eventual merger between EPCIB and Banco de Oro.

The Monetary Board approved the transfer of the EBCII and GSIS shares to SM Investment, the investment arm of the SM Group, formalizing the SM Group’s acquisition of controlling interest in EPCIB.

The shares of GSIS and EBCII were unloaded in a special block sale at the Philippine Stock Exchange last October and was bought by the SM Group in a tender offer.

The SM Group paid an estimated P15.47 billion, and added exactly 25.69 percent more to the holdings of the SM Group of retail tycoon Henry Sy in EPCIB.

Before the tender offer, the SM Group already held 34 percent of EPCIB. The group them sought to acquire control of EPCIB in order to facilitate the merger with its flagship bank, Banco de Oro Universal Bank.

Before the tender, GSIS held 13.55 percent of Equitable and EBC Investment owned 10.8 percent. There were also individual shareholders who sold to the SM Group and together, they held 1.34 percent of EPCIB.

The SM Group also made a similar offer to the Social Security System which owned 25.84 percent of EPCIB but the sale of the shares was to court and still has to be resolved by the Supreme Court.

If allowed by the Supreme Court, the SM Group’s acquisition of the SSS shares would give the group a total of 85.6 percent of the bank, more than the 67 percent needed to facilitate the merger between EPCIB and BDO.

The actual merger would involve swapping of shares between BDO and EPCIB. The plan is to exchange 1.8 BDO shares for every EPCI share with BDO as the surviving entity.

According to Leny Sylvestre, acting managing director of the BSP’s Supervision and Examination Section (SES), both banks would require more regulatory clearances from the BSP once they succeed at getting the approval of their respective stockholders.

Sylvester explained that the MB approval of the initial acquisition meant that the transaction has met all the regulatory and documentary requirements set under the BSP rules.

Once the final merger is consummated, the combined entity would be called Banco de Oro-EPCI. The new bank would have total assets of P613 billion, slightly below the P630 billion assets of the nation’s largest lender, Metropolitan Bank & Trust Co.

The merger would catapult BDO to the second position, unseating the Ayala-owned Bank of the Philippine Islands (BPI) with total assets of P529 billion as of the end of September.