Ayala subscribes to P10 billion of BPI stock rights offer

MANILA, Philippines - The board of conglomerate Ayala Corp. has approved the purchase of up to P10 billion worth of stocks of its subsidiary Bank of the Philippine Islands (BPI).

In a disclosure to securities regulators yesterday, Ayala Corp. chief finance officer Delfin C. Gonzalez Jr. said the board has approved the subscription “to our pro-rata share in the stock rights offering of BPI of up to P10 billion.”

Ayala Corp. recently bought back its own outstanding shares as well its treasury shares, amounting to P9.75 billion and P13.1 billion, respectively.

Ayala already owns 706.936 million common shares of BPI or roughly 21 percent of total outstanding shares.

In an earlier report, BPI corporate secretary Carlos B. Aquino said that the stock rights offer is aimed at boosting the bank’s capital, thus preparing it “to grab growth opportunities, organic or through acquisition.”

“The bank expects the rights issue to enhance its competitive differentiation versus its peers in the market as it seeks to capitalize on opportunities in the banking sector while also addressing market expectations for higher core equity levels for financial institutions globally,” he said.

Among the commercial bank up for grabs is the Philippine Bank of Communications (PBCom). Unconfirmed reports indicate there are three interested parties undertaking due diligence on PBCom.

Another bank rumored to be on the auction block is Security Banking Corp.

PBCom is strong in the middle market segment of the banking sector, aside from having a number of branches located within the restricted areas for branch expansion. The restricted areas, assigned by the Bangko Sentral ng Pilipinas (BSP), are mainly within the Metro Manila area.

Banking sources said it is an attractive bank although reports indicate that the premiums may be restrictive likewise. The same sources said the interested buyers also want to get certain incentives from the regulators before committing to the acquisition.