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Ayalas to bid for 67% stake in PNB
Posted: 9:23 PM | Jul. 17, 2005
Doris C. Dumlao
Inquirer News Service
Published on Page B1 of the July 18, 2005 issue of the Philippine Daily Inquirer.
THE AYALAS' Bank of the Philippine Islands, the country's second biggest bank, will challenge tobacco magnate Lucio Tan over the right to buy a controlling stake in Philippine National Bank.
In an interview with the Inquirer, BPI president Aurelio Montinola III said the bank had submitted the documents needed to prequalify for the auction on Aug. 12 of a 67-percent stake in PNB held jointly by the government and the Tan group.
"We submitted a letter of intent," Montinola said. "But we do it as a normal course--to look at other institutions."
A potential merger with PNB, assuming BPI would win the bidding, can catapult the bank into the country's biggest and finally edge out taipan George Ty's Metropolitan Bank and Trust Co., which has been at the top since 1996.
"We always look where there's a willing seller. You never can tell but it's still very premature," the BPI chief added.
In separate interviews, Metrobank vice chair Placido Mapa said his bank was not keen on bidding for PNB while another top official, Metrobank executive vice president Angelito Villanueva, stressed the bank was not likely to undertake any major acquisition "in the immediate future."
BPI has started discussions with ING Bank, the financial adviser for the PNB bidding.
The deadline to submit prequalification documents for next month's bidding expired last July 1, but a government task force handling the sale led by Philippine Deposit Insurance Corp. (PDIC) does not intend to release the list of prequalified bidders.
"You will know the actual bidders when we open the bids," said Romeo Mendoza Jr., PDIC senior vice president and general counsel. "Suffice to say, the government is driving this privatization and the bidding will push through."
Mendoza said the minimum requirements for the bidding to push through, the current political turbulence notwithstanding, had been met--first, that Lucio Tan, who owned half of the stake to be auctioned, would participate, and at least one other bidder would challenge.
The Lucio Tan group has announced it would exercise its right to match the highest bid for the controlling stake in PNB.
Montinola said that BPI was on an expansion binge and evaluating about three or four potential acquisitions at one point.
He declined to say how advanced the negotiations were over the Santos family's controlling stake in another publicly listed universal bank, Prudential Bank. The banker said it was possible, however, that an acquisition deal--without specifically referring to Prudential Bank--may be completed this second half of the year.
BPI's parent firm Ayala Corp., with such huge subsidiaries as Ayala Land Inc. and Globe Telecoms, has a market capitalization of P129 billion and is seen to be in a strong position to raise funds for any major acquisition.
Alfred Dy, head of research at stock brokerage CLSA Securities Philippines Inc., said in a recent study: "We believe that BPI has no choice but to make an acquisition to protect its market share. This is especially so given Banco De Oro's aspirations to be one of the top three banks in the country in the medium term."
PNB, once the country's biggest bank controlling 25 percent of the banking system's assets, is now ranked sixth with total assets of about P219 billion as of the first quarter.
Dont think Ayala will start a bidding war. My impression is they submitted a bid only and wouldnt engage in a bidding war especially if there are any truth that they are finalizing their deal w/ Prudential as well as seriously looking to take in RCBC.
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