Ongpin bloc forays into banking, sets eye on PBCom

OBJECT OF DESIRE The group led by Roberto V. Ongpin wants to acquire the Philippine Bank of Communications, which has a floor price of P4.3 billion.

A group led by former Trade Minister Roberto V. Ongpin seeks to gain a foothold in the banking business by acquiring a controlling stake in medium-sized lender Philippine Bank of Communications.

Three sources familiar with the group told the Inquirer that Ongpin himself had initiated talks with the state-owned Philippine Deposit Insurance Corp. on his prospective entry into PBCom.

Key shareholders of the bank had already informed PDIC that they would turn over controlling stake in the bank to a new investor, one banking source said.

PDIC supported PBCom’s rehabilitation by providing the bank P7.6 billion in financial assistance in 2004.

Ongpin was responsible for bringing in British fund Ashmore, which had been investing heavily in the Philippines in recent years.

The country’s largest lender Banco de Oro Unibank also “inquired” about the PBCom bidding, another banking source said.

At least two other banks had participated in an earlier bidding for PBCom—Security Bank and East West Bank.

Both are expected to participate in the new auction, the banking sources said.

PBCom is on the auction block commanding a floor price of P4.3 billion, or about P25 per common and preferred share.

The Macquarie group, adviser to PBCom’s controlling stakeholders, is now talking to prospective investors.

Investors’ deadline for their submission of buyout offers has been extended to June 15 from May 31.

Industry sources said Ongpin’s group, which recently sold a substantial stake in Express Telecommunications Philippines Inc., was keen on acquiring a banking franchise and could offer a sweeter deal compared with other banks.

The 64-branch PBCom is seen to attract new entrants like Ongpin rather than existing players who may not be willing to pay as much just to acquire additional branches. The Bangko Sentral ng Pilipinas, after all, is expected to liberalize branching limits within the next three years.

A source said that for a new player like Ongpin, PBCom’s existing banking franchise and niche middle-market Chinese client base could prove to be valuable.

Publicly listed ISM Communications is likely to be Ongpin’s vehicle in its foray into the banking industry because the company still has no major business although it does have idle cash from the sale of its substantial stake in Eastern Telecommunications Philippines Inc., the source said.

Ongpin is also part of the group that holds a controlling stake in San Miguel Corp.

But another source said neither SMC nor its banking arm, Bank of Commerce, was interested in acquiring PBCom.

Aside from San Miguel, Ongpin’s group has interests in real-estate development (Alphaland Corp.), mining (Atok Big Wedge Co. Inc.), information technology and gaming (Philweb Corp.) and oil refinery (Petron Corp.).

PBCom is owned by three families: The Luys (37 percent), the Nublas (28 percent) and the Chungs (26 percent). All have agreed to jointly sell their controlling stake in the bank.

The bank is ranked 22nd among the country’s 38 commercial banks, with assets of around P43.8 billion at end-2010, according to data provided by the Bangko Sentral ng Pilipinas.

PBCom has P8.4 billion in net loans and receivables and a deposit base of P27.6 billion.

Based on data from the Philippine Stock Exchange, PBCom has about 52.6 million common shares and another 120 million preferred shares. In the upcoming bidding, all shares will command a floor price of P25 apiece.

This means that PBcom is worth around P4.3 billion. This includes the amount to be spent for the mandatory tender to minority shareholders.