Ongpin bloc takes over PBCom in P4.7B deal

MANILA, Philippines—A group led by former Trade Minister Roberto V. Ongpin has sealed the acquisition of a 97.28-percent stake in Philippine Bank of Communications for P4.68 billion, gaining a foothold in the competitive local banking arena.

In a disclosure to the Philippine Stock Exchange, Ongpin’s ISM Communications Corp. said the three major shareholders of PBCom—the Chung, Luy and Nubla families—had signed the memorandum of agreement with the ISM-led consortium.

The deal pricing implies that ISM will pay the selling shareholders about P27.88 per PBCom share, which is better than the floor price of P25 a share that was earlier set for the bidding.

This transaction is also expected to trigger a mandatory tender offer to the remaining minority shareholders. But PBCom shares are now trading at a higher price, having gone up at the stock market ahead of the entry of a new strategic investor.

PBCom’s common shares on Wednesday closed at P79 apiece, up by close to 20 percent. This means that the market value of ISM’s investment in PBCom has surged by 183 percent as soon as the transaction was sealed.

Selling shareholders earlier selected ISM to become the bank’s “third party” investor subject to regulatory approvals after a public bidding was held for a controlling stake in the bank.

The PSE on Wednesday suspended trading on ISM shares from 9 a.m. to 10 a.m. to allow the investing public to digest this information.

In a special ISM board meeting, Ongpin was elected the new PBCom chairman while ISM president Eric Recto, who is also president of Petron Corp., was elected vice chairman.

Former Development Bank of the Philippines president Reynaldo David was named director while Rodolfo Ma. Ponferrada became the corporate secretary and information officer.

Banking sources said the Ongpin group would retain PBCom’s incumbent president Henry Uy at the helm. Uy has been with PBCom for the last 25 years.

ISM, which recently sold a substantial stake in Express Telecommunications Philippines Inc., is acquiring through PBCom a banking franchise with a 64-branch network and a niche middle-market Chinese clientele base. 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 British fund Ashmore, which has been investing heavily in the Philippines in the last few years, is also part of the group that holds the controlling stake in San Miguel Corp.

His group also 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.).

Originally posted at 03:11 pm | Wednesday, July 27, 2011