Philtrust takeover of PBCom faces hurdle

The planned takeover by Philippine Trust Co. (Philtrust) of another mid-sized commercial bank in Philippine Bank of Communication (PBCom) faces a major hurdle as the latter said controlling interest of the bank can only be sold as one block as per the P7.64-billion financial assistance package it signed with the Philippine Deposit Insurance Corp. (PDIC) in 2004.

In a disclosure to the Philippine Stock Exchange, PBCom corporate information officer Bernard Lopez said the agreement with PDIC states that" controlling interest may only be sold as one block except in case of transfer of any portion thereof by operation of law or by reason of death."

Under the deal with PDIC, the bank’s major shareholders would have to divest their holdings in PBCom, or at least 67 percent, in favor of a strategic third party investor, within five years.

The agreement further stipulated that the sale be approved by regulatory agencies PDIC and the Bangko Sentral ng Pilipinas.

Earlier this week, Philtrust, owned by Filipino-Chinese tycoon Emilio Yap, has made a tender offer for the purchase of up to 100 percent of PBCom

At P30 per share offer price, the sale of PBCom’s total outstanding common and preferred shares will cost Philtrust over P5 billion.

Because Philtrust has already accepted the offer to buy the PBCom shares of the Nubla and Chung families, the tender offer will cover only the remaining 41.74 percent outstanding capital stock of PBCom.

On Nov. 20 last year, the directors of Philtrust accepted the formal offer of two of the three major stockholders of PBCom and acquired 58.26 percent common and preferred shares for P3.02 billion. The agreement between the two families and Philtrust has left out the Luy family, the single largest shareholder in PBCom holding 37 percent of the shares.

PDIC acting president Michael Osmena said Philtrust is in talks with the Luy family in order to obtain controlling interest of at least 67 percent of the bank. However, industry insiders said the family is dissatisfied with the P30 per share offer price as PBCom shares are being traded at over P60 apiece in the market when the offer was made. PBCom shares last closed at P55 per share in stockmarket trading.

Should Philtrust succeed in taking control of PBCom, a merger between the two medium-sized banks would create the country’s 13th biggest bank, with total assets of P115.4 billion.

Currently PBCom is ranked 19th with total assets of P60.3 billion and Philtrust, 20th with P55.1 billion.