City Savings takes over AEV’s remittance business Petnet
Conglomerate Aboitiz Equity Ventures (AEV) has agreed to sell a 51-percent stake in cash remittance and payments firm Petnet Inc. to thrift bank arm City Savings Bank and Union Properties Inc. for about P1.2 billion, thus consolidating the group’s financial services business.
“This is in line with our financial inclusion strategy. Having more counters around the country will enable us to reach more unbanked and underbanked Filipinos,” City Savings Bank chair and Union Bank senior executive vice president Eugene Acevedo said in a text message on Monday, when asked about the rationale behind the deal.
Acevedo said this was what Union Bank president and chief executive Edwin Bautista was referring to previously as “inclusive prosperity.”
The deal will consolidate AEV’s interests in banking and financial services under Union Bank, which is 48.83-percent owned by AEV. Union Bank, in turn, owns 99.77 percent of City Savings and 100 percent of Union Properties.
The consolidation is seen to “unlock shareholder value from the synergies between the core businesses of City Savings and Petnet.”
Petnet is a leading transaction center with over 2,500 locations nationwide, providing its customers with a comprehensive scope of reliable financial services under Western Union International and Domestic Remittance, money changing, bills payment, e-loading, Department of Education loans, Government Service Insurance System pension loan acceptance and microinsurance in one location.
A share purchase agreement has already been signed involving 2.46 million shares valued at P487.54 each, AEV said in a disclosure to the Philippine Stock Exchange on Monday.
“The value of the transaction is based on the parties’ agreed enterprise value for Petnet and its assets, net of the amount attributable to the other shareholders of Petnet,” the disclosure read.
The deal is still subject to approvals by the Philippine Competition Commission (PCC) and the Bangko Sentral.
AEV acquired 51 percent of Petnet in mid-2015 for about P1 billion, citing opportunities from the remittances of overseas Filipino workers and the distribution of complementary products through an extensive network of outlets.
Facing competition from other remittance companies in terms of number of branches, novel products and services and aggressive promotions, Petnet has since then embarked on a rapid expansion program. —DORIS DUMLAO-ABADILLA
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