Ongpin group leads race for control of PBCom

MANILA, Philippines — The group of former trade minister Roberto V. Ongpin is leading the race for control of Philippine Bank of Communications, which has attracted suitors wishing to venture into the commercial banking business for the first time.

The two other groups that had submitted a firm offer to acquire PBCom, as of the June 15 deadline, were the group of accounting veteran Jose Araullo and Malayan Integrated Industries Corp.

The proposals are now currently being evaluated by transaction financial adviser Macquarie Capital (Singapore) Pte Ltd., which has, however, already identified Ongpin’s group as the only one compliant with all the bidding requirements.

Other banking sources said Banco de Oro Unibank’s proposal came in late and thus could no longer be considered while Security Bank, albeit interested in PBCom, had not submitted a firm proposal.

In a report to the state-owned Philippine Deposit Insurance Corp. dated June 16, or the day after the bidding deadline, Macquarie said the offer submitted by Ongpin-led ISM Communications Corp. was the only one that could be deemed a “valid offer.”

“…Only ISM did an extensive due diligence review of PBCom which indicates to us the seriousness of this party to evaluate the state of PBCom and to purchase and operate the bank,” said the memorandum, a copy of which was obtained by the Philippine Daily Inquirer.

Araullo’s group, on the other hand, proposed to team up with an unnamed foreign partner to take over PBCom.  However, Macquarie deemed that the group’s proposal was not valid because it did not identify all the intended buyers in the consortium.

In the case of Malayan group, this bidder failed to convince Macquarie that it had sufficient capability to operate the business of PBCom, the documents suggested.

Other sources said that two of the three major shareholders, the Chung and Nubla families, had already signified early on their intention to award the bidding to ISM. But the Luys sought the deferral of the award claiming that their preferred bidder, the Araullo group, would come up with the necessary funds and appropriate documentation.

The delay in the awarding has prompted front-runner ISM to seek PDIC intervention but banking sources said such concern had been addressed, as of press time, and that PBCom might soon be awarded to Ongpin’s group, subject to approval from the PDIC and the Bangko Sentral ng Pilipinas.

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

Industry sources said Ongpin’s group, which recently sold a substantial stake in Express Telecommunications Philippines Inc., has been keen on acquiring a banking franchise and that the existing 64-branch banking franchise and niche middle-market Chinese client base of PBCom could prove to be valuable.

PBCom is ranked 22nd among the country’s 38 commercial banks, with assets of around P43.8 billion at end-2010.

Ongpin, the local partner of the British fund Ashmore, which has been investing heavily in the Philippines in the last few years, is also part of the group that holds a controlling stake in San Miguel Corp.  His 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.)