ISM seals takeover deal with PBCom shareholders

MANILA, Philippines - Ongpin-led ISM Communications Corp. has sealed an agreement to take over the mid-sized Philippine Bank of Communications (PBCom) from the three major shareholder groups for P4.681 billion.

In a disclosure to the Philippine Stock Exchange, PBCom corporate information officer Bernard Lopez said ISM, a publicly-listed IT and gaming firm, signed on Tuesday a memorandum of agreement (MOA) with the Chung, Luy and Nubla groups for the sale of their entire stake in the bank, equivalent to 97.28 percent of PBCom’s outstanding capital.

PBCom, the country’s 22nd largest commercial bank, was offered at a floor price of P4.3 billion or about P25 per common and preferred share. The bank has 64 branches, majority of which are located within Metro Manila.

The Nubla, Chung and Luy families hold a combined 97 percent stake in PBCom but had to dispose of their shareholdings as part of an agreement with state-run Philippine Deposit Insurance Corp. (PDIC) following the bank’s rehabilitation in 2004. PBCom received a P7.6-billion financial assistance package from PDIC.

Lopez said the Chung and Nubla groups, however, “have expressed their intention to reinvest the proceeds of the sale of their respective shares in the company at the same price or up to a total of P2.8 billion.”

As a result, Ralph Nubla Jr., Carlos Chung and Henry Uy will remain on the bank’s board of directors, with Uy retaining his post as president.

Businessman and former Trade Minister Roberto Ongpin was elected as the bank’s new chairman while Eric Recto, the concurrent president of Petron Corp., is vice chairman.

In an earlier disclosure to the PSE, ISM corporate information officer Rodolfo Ponferrada said all terms and conditions for the company’s investment in PBCom, including the scheme of payment for the purchase price, are still subject to regulatory approvals and appropriate documentation.

ISM was formed by the Ongpin Group in 2002 as a holding company primarily for their IT, telecom and gaming businesses. The group also includes local gaming conglomerate PhilWeb Corp. and British investment fund Ashmore Group Plc.