Biz Buzz: Lowball offer for PAL

Lucio Tan’s eagerly anticipated buyback offer to San Miguel for the latter’s stake in Philippine Airlines was presented to the conglomerate’s head honcho Ramon Ang last Friday, as scheduled.

According to our sources, “Kapitan” offered to pay San Miguel $372 million for the 49-percent stake in the airline (which the conglomerate acquired two years ago for $500 million). The balance of the buyback offer—some $800 million—would be settled over a two-year installment period, the term sheet further stated.

One source with knowledge of the transaction details commented that the payment period was simply too long, and that Tan put nothing on the table by way of guaranteeing that the payments will be made.

“Without any payment guarantee, a two-year installment period is a long time,” the source said. “And the offer is, frankly, a bit low.”

When asked for comment, Ang simply replied: “Still in talks.”

At this point, however, the offer doesn’t look attractive enough for SMC’s boss.

And it doesn’t look like the status quo in PAL will be maintained for much longer. Abangan! Daxim L. Lucas

Veterans Bank in the spotlight

The rehabilitation of Philippine Veterans Bank (PVB) is about to suffer another setback as a group of veterans led by retired general Ramon Montaño formally questioned the appointment to the bank’s board of supposedly “unqualified” officials.

In a letter sent to the Office of the President and endorsed to the Bangko Sentral ng Pilipinas, Montaño alleged that only veterans or their direct descendants were qualified to sit in the bank’s board, under the bank’s charter.

While the letter did not specify the “unqualified” directors, a check with the annual report of the bank showed that Nieves Confesor, Judith Lopez and Joey Bermudez sit on the board despite not being veterans’ direct descendants.

Incidentally, all three directors were personally invited to the board last year by the bank’s new chair, former finance secretary Roberto de Ocampo, because of their credentials. Confesor was labor secretary under President Fidel Ramos and is now dean of the Asian Institute of Management. Lopez was managing partner of Price Waterhouse in the Philippines and president of the Financial Executives Institute of the Philippines (Finex). Bermudez is an experienced bank CEO and former president of the Management Association of the Philippines.

Years ago, the BSP allowed the late Sunday Lavin—who was neither a veteran nor a direct descendant of a veteran—to serve as director and president of the bank.

A 2002 opinion issued by Juan de Zuñiga Jr., then BSP chief legal counsel and now Monetary Board member, said the requirement for directors to be either veterans or direct descendants of veterans was applicable only during the first five years of the bank’s existence. On the strength of this opinion, the BSP allowed Jose Nuñez (now Development Bank of the Pihilippines chair) to sit on the PVB board even if he was not a veteran’s direct descendant.

Before Confesor, Lopez and Bermudez were appointed last year along with four other new directors, the bank’s board was made up mostly of octogenarian veterans with no solid experience in banking and finance.

The veterans sector has been in the news lately because of many controversies and the Montaño complaint appears to be merely a spillover of the infighting within the sector.

However, by dragging PVB into its ugly battles and resuscitating an issue that has been previously resolved, the Montaño group may be putting the bank through an unnecessary— and dangerous—distraction. Daxim L. Lucas

COL@15

Leading online stockbrokerage COL Financial is set to celebrate its 15-year anniversary by hitting several milestones this year. By next month, COL expects to breach the 100,000-mark in terms of customer accounts, representing a big market share out of the less than 1 percent of the Philippine population involved in stock trading.

By October this year, COL Financial is also set to launch its newest service of mutual fund distribution, adopting the open architecture used by multinational financial institutions where it will broker mutual funds created and managed by other partner organizations. For now, it will not offer any funds managed by its own people. But more than just being an aggregator of mutual funds, COL president Conrado “Dino” Bate said the company would also guide investors to better understand these products.

COL has brought onboard fund management veteran Marvin Fausto—who went on early retirement as chief investment officer of Banco de Oro—as a consultant on this initiative to diversify into the mutual fund distribution business.

In a briefing last week, Bate also announced the launch of a new mobile app for COL clients and a more active social media strategy for the online stock brokerage. Once a week, through “Twitter Wednesday,” COL head of research April Lee-Tan and chief technical analyst Juanis Barredo are expected to engage the public using live microblogging platform Twitter.

COL is also setting up shop in Makati—at the Citibank Tower—to create a new venue for customers to open accounts and attend stock trading seminars.

Lastly, COL will team up with Caylum Trading Institute (CTI) to boost education on global market trading. Caylum, a private, financial educational institute that focuses on developing professional traders who can execute effective trading strategies across global markets, was set up by Edmund Lee, son of COL founder and chair Edward Lee. Doris C. Dumlao

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