PNB, Allied complete merger via share-swap deal

Tycoon Lucio Tan’s banking arms Philippine National Bank and Allied Banking Corp. have consummated their legal merger through a share-swap deal, with PNB as the surviving entity.

Office-in-charge Omar Byron Mier was appointed president of the merged bank, replacing Carlos Pedro who had been on sick leave since suffering a stroke in July last year, the bank disclosed to the Philippine Stock Exchange Monday.

The merger of PNB and Allied Bank took effect on Feb. 9 (Saturday), a separate disclosure said. One effect of the merger was that PNB’s public float had been reduced to 18.99 percent from 31.15 percent prior to the merger.

To factor in the wider balance sheet, PNB is moving to amend its charter to increase its authorized capital stock to P70 billion from P50 billion. The proposed authorized capital, which was approved by the board but still subject to approval by stockholders and the Securities and Exchange Commission, would comprise about 1.75 billion common shares with a par value of P40 each.

PNB has an authorized capital stock of 1.25 billion shares, of which the issued shares increased to 1.09 billion from 662.24 million prior to the merger with Allied Bank.

The merger was executed through a share-swap in which all the issued and outstanding common shares of Allied Bank were converted to common shares of PNB at a ratio of 130 PNB common shares for each issued Allied Bank common share. All the issued and outstanding preferred stock of Allied Bank were also converted to PNB common shares at a ratio of 22.763 PNB common shares for each issued Allied Bank preferred share. PNB issued 423.96 million new common shares out of its authorized and unissued capital stock to swap for the outstanding Allied Bank common shares and preferred shares.

But while the legal merger has been executed, the completion of integration would take about 18 to 24 months, Mier earlier said. He added that any merger and acquisition would likely proceed only once integration has been finished.

The Lucio Tan group has been in talks with the Ayalas for a prospective Bank of the Philippine Island-Philippine National Bank union but the exclusivity period lapsed last September, opening the door for new suitors.

A combined PNB-Allied Bank entity has combined assets of about P560 billion and 671 branches. It also enjoys the biggest overseas footprint with 115-120 offshore units.